02093cas a2200253 a 4500 AALejournalIMF021110 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513550817 1018-5941 BD-DhAAL BD-DhAAL Bergant, Katharina. Forbearance Patterns in the Post-Crisis Period / Katharina Bergant, Thore Kockerols. Washington, D.C. : International Monetary Fund, 2020. 1 online resource (43 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Using supervisory loan-level data on corporate loans, we show that banks facing high levels of non-performing loans relative to their capital and provisions were more likely to grant forbearance measures to the riskiest group of borrowers. More specifically, we find that risky borrowers are more likely to get an increase in the overall limit or the maturity of a loan product from a distressed lender. As a second step, we analyse the effectiveness of this practice in reducing the probability of default. We show that the most common measure of forbearance is effective in the short run but no forbearance measure significantly reduces the probability of default in the long run. Our evidence also suggests that forbearance and new lending are substitutes for banks, as high shares of forbearance are negatively correlated with new lending to the same group of borrowers. Taken together, these findings can help policy makers shape surveillance and regulation in a future recovery from the Covid-19 pandemic. Mode of access: Internet Kockerols, Thore. IMF Working Papers; Working Paper ; No. 2020/140 Full text available on IMF http://elibrary.imf.org/view/journals/001/2020/140/001.2020.issue-140-en.xml IMF e-Library