Who Pays for Financial Crises? Price and Quantity Rationing of Publicly-Listed and Privately-Held Borrowers

Financial crises yield price and quantity rationing of creditworthy borrowers. However, little is known about the relative severity of these rationing types, which borrowers are rationed most, and differences between these borrowers in different nations. Our international data on over 18,000 business loans suggest that publicly-listed firms are more often price rationed, whereas privately-held firms are more frequently quantity rationed, consistent with implications of Calomiris and Hubbard’s (1990) asymmetric information model. We uncover further differences between foreign and domestic banks and between U.S. and non-U.S. banks. We also demonstrate that financial crises change loan pricing