Relationships with securitization-heavy banks worsen credit access during crises.
Banks involved in securitization impact credit supply. Asset backed securities (ABS) and covered bonds influence lending before and during financial crises. ABS activity may lower lending standards, leading to reduced lending in crisis times. Longer relationships with a firm's main bank improve credit supply. Banks more involved in securitization activities relax credit constraints in normal periods. However, ABS issuance by a firm's main bank worsens credit rationing during crises, while covered bond issuance helps ease credit constraints.