34–52; Bevilaqua, J., Hale, G. and Tallman, E. (2020), “Corporate yields and sovereign yields”, Journal of International Economics; Eichengreen, B. and A. Mody (2000), “What explains changing spreads on emerging market debt? Capital Flows and the Emerging Economies: Theory, Evidence, and Controversies”, University of Chicago Press.
Lack of transparency coupled with an implicit government guarantee for banks encouraged investors to lend too much to banks too cheaply, with the consequence that capital was not allocated efficiently. Poor bankruptcy laws and procedures have made recovery on nonperforming bank loans a long and costly procedure.