Firms' currency exposure may result in financial distress and trigger macroeconomic
instability. Such exposure can be hedged using currency over-the-counter derivatives. We
investigate how lending relationships affect the access to these derivatives using novel loan
and derivatives microdata. We document that firms are more likely to buy derivatives from
one of their lenders than from a non-lending bank. We also find that prices are lower for
derivatives provided by the main lender. These results are stronger among smallfirms.
Our findings are consistent with lending relationships mitigating information asymmetries and
banks providing derivatives to reduce their own loan portfolio risk.
Rafael is also spending a visiting research period at DISA at this moment.
You can find his profile at this page: https://eaesp.fgv.br/en/people/rafael-felipe-schioze
The seminar will be held in English.
Major information: Andi Duqi (andi.duqi@unibo.it).