Conditional Allocation of Control Rights in Venture Capital Finance

When a young entrepreneurial firm matures, it is often necessary to replace the founding entrepreneur by a professional manager. This replacement decision can be affected by the private benefits of control enjoyed by the entrepreneur which gives rise to a conflict of interest between the entrepreneur and the venture capitalist. We show that a combination of convertible securities and contingent control rights can be used to resolve this conflict efficiently. This contractual arrangement is frequently observed in venture capital finance

Banking competition and welfare

We develop a simple general equilibrium model in which investment in a risky technology is subject to moral hazard and banks can extract market power rents. We show that more bank competition results in lower economy-wide risk, higher social welfare, lower bank capital ratios, more efficient production plans and Pareto-ranked real allocations. Perfect competition supports a second best allocation and optimal levels of bank risk and capitalization. These results are at variance with those obtained by a large literature that has studied a similar environment in partial equilibrium, they are empirically relevant, and carry significant implications for policy guidance

Credit Supply: Identifying Balance-Sheet Channels with Loan Applications and Granted Loans

To identify credit availability we analyze the extensive and intensive margins of lending with loan applications and all loans granted in Spain. We find that during the period analyzed both worse economic and tighter monetary conditions reduce loan granting, especially to firms or from banks with lower capital or liquidity ratios. Moreover, responding to applications for the same loan, weak banks are less likely to grant the loan. Our results suggest that firms cannot offset the resultant credit restriction by turning to other banks. Importantly the bank-lending channel is notably stronger when we account for unobserved time-varying firm heterogeneity in loan demand and quality

Credit Protection and Lending Relationships

We examine the impact CDS protection on lending relationships and efficiency. CDS insulate lenders against losses from forcing borrowers into default and liquidation. This improves the credibility of foreclosure threats, which can have positive implications for borrower incentives and credit availability ex ante. However, lenders may also abuse their enhanced bargaining power vis-a-vis borrowers and extract additional surplus in debt renegotiations. If this hold up threat becomes severe, borrowers will be reluctant to agree to debt maturity designs or control right transfers that would have been optimal in the absence of CDS protection. The introduction of CDS markets may then ultimately tighten credit constraints and be detrimental to welfare

Bottlenecks in the Acute Stroke Care System during the COVID-19 Pandemic in Catalonia

Introduction: The COVID-19 pandemic resulted in significant healthcare reorganizations, potentially striking standard medical care. We investigated the impact of the COVID-19 pandemic on acute stroke care quality and clinical outcomes to detect healthcare system's bottlenecks from a territorial point of view. Methods: Crossed-data analysis between a prospective nation-based mandatory registry of acute stroke, Emergency Medical System (EMS) records, and daily incidence of COVID-19 in Catalonia (Spain). We included all stroke code activations during the pandemic (March 15-May 2, 2020) and an immediate prepandemic period (January 26-March 14, 2020). Primary outcomes were stroke code activations and reperfusion therapies in both periods. Secondary outcomes included clinical characteristics, workflow metrics, differences across types of stroke centers, correlation analysis between weekly EMS alerts, COVID-19 cases, and workflow metrics, and impact on mortality and clinical outcome at 90 days. Results: Stroke code activations decreased by 22% and reperfusion therapies dropped by 29% during the pandemic period, with no differences in age, stroke severity, or large vessel occlusion. Calls to EMS were handled 42 min later, and time from onset to hospital arrival increased by 53 min, with significant correlations between weekly COVID-19 cases and more EMS calls (rho = 0.81), less stroke code activations (rho = -0.37), and longer prehospital delays (rho = 0.25). Telestroke centers were afflicted with higher reductions in stroke code activations, reperfusion treatments, referrals to endovascular centers, and increased delays to thrombolytics. The independent odds of death increased (OR 1.6 [1.05-2.4], p 0.03) and good functional outcome decreased (mRS ≤2 at 90 days: OR 0.6 [0.4-0.9], p 0.015) during the pandemic period. Conclusion: During the COVID-19 pandemic, Catalonia's stroke system's weakest points were the delay to EMS alert and a decline of stroke code activations, reperfusion treatments, and interhospital transfers, mostly at local centers. Patients suffering an acute stroke during the pandemic period had higher odds of poor functional outcome and death. The complete stroke care system's analysis is crucial to allocate resources appropriately