Savings accounts are owned by most households, but little is known about the performance of households’ investments. We create a unique dataset by matching information on individual savings accounts from the DNB Household Survey with market data on account-specific interest rates and...

I explore an alternative mortgage contract that limits negative equity by tying outstanding debt to an index of house prices. This is done in an incomplete markets model, that is calibrated to match US micro- and macro-data. I find that switching from a non-recourse contract to an indexed...

“Best practice” in microfinance holds that interest rates should be set at profit-making levels, based on the belief that even poor customers favor access to finance over low fees. Despite this core belief, little direct evidence exists on the price elasticity of credit demand in poor...

This paper presents an alternative framework for modeling the behavior of banks in setting lending and/or saving rates. In a short-run dynamic model, we correct for deviations from the long-run path using three feedback coefficients capturing different disequilibria. This enables us to test for...

The relevance of bank lending channel for the transmission process of monetary policy in Malaysia is investigated using the autoregressive-distributed lag (ARDL) model. The newly developed bounds test (Pesaran, et al. 2001) is employed to determine the specification of this model. Deposits tend...

This paper starts from the observation that 23% of the world’s microfinance institutions (MFIs) manage without subsidies. We examine how unsubsidized institutions cope with their social mission. Overall, the lack of subsidies worsens social performances. However, our results show that...

Purpose – This paper aims to identify factors that affect agricultural mortgage default and prepayment. Design/methodology/approach – Using a sample of farm credit system loans, prepayment and default are modeled as competing risks with potentially non‐stationary covariates using a...

Much farm financial risk research has involved the application of “credit‐scoring” models. We approach the issue of measuring financial risk by using the actual interest rates charged on agricultural loans reported in the USDA’s ARMS survey as market‐based measures of the financial...

This paper reviews the prevalence of the use of risk ratings by commercial banks that participated in the Federal Reserve’s Survey of Terms of Bank Lending to Farmers between 1997 and 2002. Adoption of risk rating procedures held about steady over the period, with a little less than half the...