Tag Archives: bank losses from toxic assets

Public Firms Weathered Recession Better Than Expected

The prevailing narrative of the financial crisis revolves around banks’ reduced ability to issue loans, but a new paper by University of Arizona associate professor of finance Kathy Kahle reveals that the credit supply shock did not affect publicly traded firms as much as expected.

Bank losses from toxic assets were responsible for the credit contraction, but those toxic assets – mostly mortgage-backed securities – are not directly related to the performance of industrial firms. (more…)

Read More