Nils Kerwien
- 16 September 2026
- WORKING PAPER SERIES - No. 3282Details
- Abstract
- Suspending loan repayments is a widely used policy tool to provide liquidity during crises. We study the take-up and real effects of the 2020 Austrian corporate debt moratoria, which required banks to temporarily postpone loan repayments for eligible firms. Exploiting a discontinuity in eligibility at a two-million-euro asset threshold, we document a take-up rate of 44%, well below full participation, reflecting both the pecuniary cost of the policy and firms’ fear of stigmatization. Despite the moderate take-up, moratoria increase investment and profitability without increasing defaults once repayments resume. We estimate a marginal propensity to invest of 47 cents per euro of postponed payments. We compare moratoria with grants, the predominant form of business support in the United States. A key feature of the policy is that relief is administered by relationship lenders, who continue to bear credit risk, retain incentives to monitor borrowers, and can credibly discipline them through future lending decisions. Although grants achieve higher take-up, our results suggest that moratoria differ fundamentally by discouraging firms from diverting liquidity to shareholders and instead channeling it toward productive investment.
- JEL Code
- G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
G35 : Financial Economics→Corporate Finance and Governance→Payout Policy
H81 : Public Economics→Miscellaneous Issues→Governmental Loans, Loan Guarantees, Credits, Grants, Bailouts
D25 : Microeconomics→Production and Organizations