Credit rationing by loan size in commercial loan markets

The authors present a theoretical model in which a profit-maximizing lender may ration credit to businesses by restricting loan size. Such credit rationing occurs despite the absence of differences across borrowers in default risk or loan administration costs. Moreover, the model predicts an interest rate-loan size pattern that matches that observed in U.S. commercial loan markets.

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Year of publication:	1992
Authors:	Schreft, Stacey L. ; Villamil, Anne P.
Published in:	Economic Review. - Federal Reserve Bank of Richmond. - 1992, May, v. 78, no. 3, p. 3-8
Publisher:	Federal Reserve Bank of Richmond
Subject:	Credit \| Bank loans

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Extent:	application/pdf
Type of publication:	Article
Language:	English
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005063988