Citi-IESE Credit and Debt Markets Project
A research project led by IESE's Center for International Finance
In an era marked by swift and transformative changes in credit and debt markets, it is imperative for market participants to navigate the emerging challenges and opportunities effectively. The Citi-IESE Credit and Debt Markets Research Project (CREDET) is dedicated to advancing research on these markets.
The environment of persistently easy monetary policy and low inflation that firms and investors had come to rely on for over a decade has been upended. Higher interest rates and the resulting elevated funding costs and tightened bank lending standards are exerting considerable pressure on the ability of corporations to service and refinance their debts, especially for firms already in distress. Additionally, private credit issuance and non-investment grade financing have significantly expanded, potentially adding vulnerabilities and complexity to the credit and debt space.
These dynamics present a rich tapestry of opportunities and challenges for both firms and investors. Through the Citi-IESE CREDET initiative, our goal is to explore the trends in credit and debt markets, enhancing understanding and highlighting the risks and opportunities within these markets. The project forms part of IESE’s Center for International Finance (CIF), which advocates a multidisciplinary approach to generate and disseminate knowledge and promotes best practices in financial institutions and capital markets. To this end, it spearheads leading-edge research, academic events and conferences, and communication platforms to bring the Center’s findings to a wider audience.
In collaboration with:
Research Topics.
IESE’s Credit and Debt Markets Research Project will carry out research in six main areas:
Publications.
- Annual Report 2023: Credit and Debt Markets Research Project
Published work
- Zombie Credit and (Dis-)Inflation: Evidence from Europe. Acharya, V. V., Crosignani, M., Eisert, T., Eufinger, C. (2023). Journal of Finance, forthcoming.
- Earnings Management to Avoid Debt Covenant Violations and Future Performance. Dyreng, S., Hillegeist, S.A., Peñalva, F. (2022). European Accounting Review, 31 (2), 311-343. doi:10.1080/09638180.2020.1826337.
- Conservatisms in debt contracting: theory and empirical evidence. Peñalva, F., Wagenhor, A. (2019). Accounting and Business Research, 49 (6), 619-647. doi:10.1080/00014788.2019.1609899.
- Merger Activity in Industry Equilibrium. Dimopoulos, T., Sacchetto, S. (2017). Journal of Financial Economics, 126 (1), 200-226. doi:10.1016/j.jfineco.2017.06.014.
Working papers
- Debt Renegotiation and the Properties of Accounting Information: Evidence from a Bankruptcy Reform. Bonetti, P. (2021).
- AI Adoption and Firm Performance: Management versus IT. Alekseeva, L., Giné, M., Samila, S., Taska, B. (2020).
- Financial Asset Aggregation and Information Loss. Curtis, A., Loh, W. T., Raney, A. R. (2023).
Published work
- Whatever It Takes: The Real Effects of Unconventional Monetary Policy. Acharya, V. V., Eisert, T., Eufinger, C., Hirsch, C. (2019). The Review of Financial Studies, 32 (9), 3366-3411. doi:10.1093/rfs/hhz005.
- Interbank Networks and Backdoor Bailouts: Benefiting from Other Banks’ Government Guarantees. Eisert, T., Eufinger, C. (2019). Management Science, 65 (8), 3470-3469. doi:10.1287/mnsc.2017.2968.
- Real Effects of the Sovereign Debt Crisis in Europe: Evidence from Syndicated Loans. Acharya, V. V., Eisert, T., Eufinger, C., Hirsch, C. (2018). The Review of Financial Studies, 31 (8), 2855-2896. doi:10.1093/rfs/hhy045.
- Making Room for the Needy: The Credit-Reallocation Effects of the ECB’s Corporate QE. Arce, Ó., Mayordomo, S., Gimeno, R. (2021). Review of Finance, 25 (1), 43-84.
- Bank capital requirements, loan guarantees and firm performance. Mayordomo, S., Moreno, A., Ongena, S., Rodríguez-Moreno, M. (2021). Journal of Financial Intermediation, 45, 100825.
- Did the bank capital relief induced by the Supporting Factor enhance SME lending?. Mayordomo, S., Rodríguez-Moreno, M. (2021). Journal of Financial Intermediation, 36, 45-57.
- Evidence from the adoption of IFRS 9 and the impact of COVID-19 on lending and regulatory capital on Spanish Banks. López-Espinosa, G., Peñalva, F., (2023). The Journal of Accounting and Public Policy, forthcoming.
Working papers
- Banks vs. Firms: Who Benefits from Credit Guarantees? Martin, A., Mayordomo, S., Vanasco, V. (2023).
- Access to credit and firm survival: the case of zero-bank-debt firms. Blanco, R., García-Posada, M., Mayordomo, S., Rodríguez-Moreno, M. (work in progress)
- How do changes in financial reporting standards affect relationship lending? Dejuan-Bitria,D., Mayordomo, S., Roibás, I. (work in progress)
- Provisioning based on Expected Credit Losses and Risk-taking Discipline. Ormazabal, G., Peñalva, F. (work in progress)
Published work
- Executive Compensation Tied to ESG Performance: International Evidence. Cohen, S., Kadach, I., Ormazabal, G., Reichelstein, S. (2023). Journal of Accounting Research, 61 (3), 805-853. doi:10.1111/1475-679X.12481.
- Institutional Investors, Climate Disclosure, and Carbon Emissions. Cohen, S. Kadach, I., Ormazabal, G. (2023). Journal of Accounting and Economics, 81. doi:10.2139/ssrn.4138869. forthcoming
- The Big three and corporate carbon emissions around the world. Azar, J., Duro, M., Kadach, I., Ormazabal, G. (2021). Journal of Financial Economics, 142 (2), 674-696. doi:10.1016/j.jfineco.2021.05.007.
- Climate Finance. Fernando, N. (2023). NPV Publishing.
Working papers
- Climate Risk, Soft Information, and Credit Supply. Álvarez, L., Mayordomo, S., Vergara-Alert, C., Vives, X. (2023).
- Mortgage Markets with Climate-Change Risk: Evidence from Wildfires in California. Issler, P., Stanton, R., Vergara-Alert, C., Wallace, N. (2020).
- Market-wide Effects of Regulating Environmental Disclosure. Bonetti, P., Kadach, I., Ormazabal, G. (work in progress)
- Social Capital and External Financing Costs. Ippolito, F., Sacchetto, S., Zhou, F. (work in progress)