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Loan guarantees for consumer credit markets

Athreya, Kartik B.; Tam, Xuan S.; Young, Eric R. - Federal Reserve Bank of Richmond - 2011

Loan guarantees are arguably the most widely used policy intervention in credit markets, especially for consumers. This may be natural, as they have several features that, a priori, suggest that they might be particularly effective in improving allocations. However, despite this, little is...

Persistent link: https://www.econbiz.de/10009320869

Optimal personal bankruptcy design : A Mirrlees approach

Grochulski, Borys - Federal Reserve Bank of Richmond - 2008

In this paper, we develop a normative theory of unsecured consumer credit and personal bankruptcy based on the optimal … unsecured debts in bankruptcy. The structure of this equilibrium and the associated restrictions on debt discharge closely match … the main qualitative features of personal credit markets and bankruptcy law that actually exist in the United States. …

Persistent link: https://www.econbiz.de/10005717282

Enterprise Debt and Economic Transformation: Financial Restructuring of the State Sector in Central and Eastern Europe

Begg, David; Portes, Richard - C.E.P.R. Discussion Papers - 1992

payments of principal and interest to creditors, who in turn have strong incentives not to declare bankruptcy. In such …

Persistent link: https://www.econbiz.de/10005123729

Are harsh penalties for default really better?

Athreya, Kartik B.; Tam, Xuan S.; Young, Eric R. - Federal Reserve Bank of Richmond - 2009

How might society ensure the allocation of credit to those who lack meaningful collateral? Two very different options that have each been pursued by a variety of societies through time and space are (i) relatively harsh penalties for default and, more recently, (ii) loan guarantee programs that...

Persistent link: https://www.econbiz.de/10005009950

Business Debt and Default in France

Bordes, Christian; Melitz, Jacques - C.E.P.R. Discussion Papers - 1989

On the basis of quarterly data in 1977-87 and the use of the Engle-Granger method of co-integration, we find that real and financial factors, insolvency and illiquidity, are all important, separate influences on the defaults of French firms. We capture the effect of illiquidity by constructing...

Persistent link: https://www.econbiz.de/10005504522

Competition, Financial Discipline and Growth

Aghion, Philippe; Dewatripont, Mathias; Rey, Patrick - C.E.P.R. Discussion Papers - 1999

This paper develops a general equilibrium model of technological adoption in an economy populated by 'satisficing' entrepreneurs whose main objective is to minimise innovative effort while keeping the firm alive. In such an economy, product market competition is shown to have a stimulating...

Persistent link: https://www.econbiz.de/10005504632

On the optimality of Ramsey taxes in Mirless economies

Grochulski, Borys - Federal Reserve Bank of Richmond - 2010

personal bankruptcy to obtain insurance. Taxes are levied to fund government expenditures. An optimal tax system consists of …

Persistent link: https://www.econbiz.de/10008764358

A quantitative theory of information and unsecured credit

Athreya, Kartik; Tam, Xuan S.; Young, Eric R. - Federal Reserve Bank of Richmond - 2011

) rising bankruptcy rates and discharge in bankruptcy, (4) rising dispersion in interest rates across households, and (5) the …

Persistent link: https://www.econbiz.de/10005387445

Creditor Rights and Corporate Risk-taking

Acharya, Viral V; Amihud, Yakov; Litov, Lubomir P. - C.E.P.R. Discussion Papers - 2008

We propose that stronger creditor rights in bankruptcy reduce corporate risk-taking. Employing country-level data, we …

Persistent link: https://www.econbiz.de/10005792443

Bank Solvency, Market Structure, and Monitoring Incentives

Caminal, Ramon; Matutes, Carmen - C.E.P.R. Discussion Papers - 1997

We analyse the impact of market structure on the probability of banking failure when banks’ loan portfolios are subject to aggregate uncertainty. In our model borrowers are subject to a moral hazard problem, which induces banks to choose between two second-best alternative devices: costly...

Persistent link: https://www.econbiz.de/10005662062