Covenants and Third-Party Creditors: Empirical and Law & Economics Insights Into a Common Pool Problem

This book adds to the debate on the effects of covenants on third-party creditors (externalities), which have recently become a focus of discussion in the contexts of bankruptcy law, corporate law and corporate governance. The general thrust of the debate is that negative effects on third-party creditors predominate because banks act in their own self-interest.

After systematising the debated potential positive and negative externalities of covenants, the book empirically examines these exte...