Lambertini, LuisaMukherjee, Abhik2022-02-252022-02-252022-02-252021-07-21https://infoscience.epfl.ch/handle/20.500.14299/185727This paper estimates the impact of stress-testing on lending spreads. We use firm-level data on syndicated loans matched with bank holding company (BHC) data in our panel regressions. Using a difference-in-difference framework, we find: (1) BHCs that failed the stress tests increased their loan pricing; (2) Loan pricing is higher for all BHCs after the commencement of the stress tests. These findings suggest that stress-test failure leads to higher spreads in the syndicated loan market after the great financial crisis.text::working paper