Bank of Italy: location, not size instrumental to debt restructuring
A paper published by the Bank of Italy in June shows that firms' structure and proximity to borrowers are the crucial determinants of whether a firm decides to restructure its debts when financially distressed, rather than size.
The literature on debt restructuring usually assumes that banks behave in a uniform way towards firms in distress, with some firms opting to restructure their debt claims towards small and medium-sized enterprises in distress, while others do not.
The authors, Giacinto
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