The Supply‐Side Determinants of Loan Contract Strictness
基于契约违反概率衡量合同严格性，发现银行在自身贷款组合遭受违约后，会向借款人提供更严格的合同，即使违约方与当前借款人处于不同行业或地区。
ABSTRACT Using a measure of contract strictness based on the probability of a covenant violation, I investigate how lender‐specific shocks impact the strictness of the loan contract that a borrower receives. Banks write tighter contracts than their peers after suffering payment defaults to their own loan portfolios, even when defaulting borrowers are in different industries and geographic regions from the current borrower. The effects persist after controlling for bank capitalization, although bank equity compression is also associated with tighter contracts. The evidence suggests that recent defaults inform the lender's perception of its own screening ability, thereby impacting its contracting behavior.