On-Site Inspecting Zombie Lending

The authors thank an anonymous associate editor, two anonymous referees, Tobias Berg (discussant), Ralph de Haas, Olivier De Jonghe (discussant), Giovanni Dell'Ariccia, Mark Dijkstra, Christian Effinger, Analisa Ferrando, Luís Costa Ferreira, Miguel García-Posada (discussant), Linda Goldberg, João Granja, Boris Hofmann (discussant), Artashes Karapetyan, Christian Leuz (discussant), Florencio Lopez-de-Silanes, Elena Loutskina, Tânia Marçal, Mike Mariathasan, David Martinez-Miera, Robert Marquez, João Mestre, Mark Mink (discussant), Klaas Mulier, Lars Norden (discussant), Diane Pierret (discussant), Tomasz Piskorski (editor), Maximiano Pinheiro, Andrea Polo, Andrea Presbitero, Lev Ratnovski, Farzad Saidi, Pedro Santos, Carola Schenone (discussant), Enrico Sette, Daniel Streitz, Javier Suarez, Oren Sussman (discussant), Anjan Thakor, and Razvan Vlahu as well as seminar participants at Banco de Portugal, International Monetary Fund, Institut für Wirtschaftsforschung Halle, Lancaster, Manchester Business School, Utrecht University, Universidad Carlos III, De Nederlandsche Bank, École Supérieure des Sciences Économiques et Commerciales, the Second Banco de España-Center for Monetary and Financial Studies Financial Stability Conference, the 10th European Banking Center Workshop, Financial Intermediation Research Society 2019, the Eighth Money and Finance Research Workshop, the Sixth Monetary Policy Committee Task Force on Banking Analysis for Monetary Policy Workshop, the Munich Workshop on Banking and Institutions, the 11th Swiss Winter Conference on Financial Intermediation, the School of Knowledge Economy and Management–Nice workshop on “Economic Growth, Innovation, and Finance,” European Finance Association 2019 Meetings, the Ninth Center for Institutional Studies Banking Workshop “Banking in Emerging Markets: Challenges and Opportunities,” Danmarks Nationalbank Conference on the Use of the Credit Register for Financial Stability Purposes, the Third Annual Workshop of the European System of Central Banks Research Cluster 3 on “Financial Stability, Macroprudential Regulation and Microprudential Supervision,” the Bundesbank–Institut für Wirtschaftsforschung Halle–ECONtribute–Centre for Economic Policy Research Conference on “Financial Intermediation in a Globalized World,” the Seventh Bordeaux Workshop in International Economics and Finance, and the Second Annual Conference of the Joint Research Center Community of Practice in Financial Research Capital Markets Union: Unlocking Europe’s Economic Potential (Community of Practice in Financial Research Award for the Best Policy-Relevant Research Paper). The authors also thank Francisca Rebelo for research assistance. The paper previously was circulated under the title “‘Inspect what you expect to get respect.’ Can bank supervisors kill zombie lending?” These are the views of the authors and do not necessarily reflect those of the Banco de Portugal or the Eurosystem.