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Livshits, Igor; MacGee, James; Tertilt, Michèle - C.E.P.R. Discussion Papers - 2011

Financial innovations are a common explanation of the rise in consumer credit and bankruptcies. To evaluate this story, we develop a simple model that incorporates two key frictions: asymmetric information about borrowers’ risk of default and a fixed cost to create each contract offered by...

Persistent link: https://www.econbiz.de/10009322977

The Myth of Financial Innovation and the Great Moderation

Den Haan, Wouter; Sterk, Vincent - C.E.P.R. Discussion Papers - 2009

Financial innovation is widely believed to be at least partly responsible for the recent financial crisis. At the same time, there are empirical and theoretical arguments that support the view that changes in financial markets played a role in the "great moderation". If both are true, then the...

Persistent link: https://www.econbiz.de/10008477177

Consumer Credit: Evidence from Italian Micro Data

Alessie, Rob; Hochguertel, Stefan; Weber, Guglielmo - C.E.P.R. Discussion Papers - 2001

In this Paper we analyse unique data on credit applications received by the leading provider of consumer credit in Italy (Findomestic). The data set covers a five year period (1995-99) during which the consumer credit market rapidly expanded in Italy and a new law came into force that set a...

Persistent link: https://www.econbiz.de/10005123988

Expanding Credit Access: Using Randomized Supply Decisions to Estimate the Impacts

Karlan, Dean S.; Zinman, Jonathan - C.E.P.R. Discussion Papers - 2007

Expanding credit access is a key ingredient of development strategies worldwide. Microfinance practitioners, policymakers, and donors have ambitious goals for expanding access, and seek efficient methods for implementing and evaluating expansion. There is less consensus on the role of consumer...

Persistent link: https://www.econbiz.de/10005114273

Household Debt and Social Interactions

Georgarakos, Dimitris; Haliassos, Michalis; Pasini, Giacomo - C.E.P.R. Discussion Papers - 2012

Debt-induced crises, including the subprime crisis, are usually attributed exclusively to supply-side factors. We examine the role of social influences on debt culture, emanating from perceived average income of peers. Utilizing unique information from a household survey, representative of the...

Persistent link: https://www.econbiz.de/10011084156

Consumption Smoothing and Income Redistribution

Bertola, Giuseppe; Koeniger, Winfried - C.E.P.R. Discussion Papers - 2007

We show theoretically that income redistribution benefits borrowing-constrained individuals more than is implied by standard relative-income and uninsurable-risk considerations. Empirically, we find in international opinion-survey data that younger and lower-income individuals express stronger...

Persistent link: https://www.econbiz.de/10005666473

A Lender-Based Theory of Collateral

Inderst, Roman; Mueller, Holger M - C.E.P.R. Discussion Papers - 2006

rejects marginally profitable projects. Collateral mitigates this inefficiency by 'flattening' the local lender’s payoff …-à-vis transaction lenders lead to higher collateral requirements, thus strengthening the role of collateral in local lending …

Persistent link: https://www.econbiz.de/10005123922

Collateral, Default Risk, and Relationship Lending: An Empirical Study on Financial Contracting

Krahnen, Jan Pieter - C.E.P.R. Discussion Papers - 2000

This paper provides new insights into the nature of relationship lending by analysing the role of collateral and its … indicate that the use of collateral in loan contracts is mainly driven by aspects of relationship lending and renegotiation … risk. Relationship lenders do require more collateral from their debtors than normal lenders for two main reasons. First …

Persistent link: https://www.econbiz.de/10005123985

Bidding and Performance in Repo Auctions: Evidence from ECB Open Market Operations

Bindseil, Ulrich; Nyborg, Kjell G; Strebulaev, Ilya - C.E.P.R. Discussion Papers - 2004

bidders are more concerned with the loser’s nightmare, collateral, and future interest rate reductions by the ECB. Small and …

Persistent link: https://www.econbiz.de/10005067452

Creditor Protection and Stock Price Volatility

Hale, Galina B; Razin, Assaf; Tong, Hui - C.E.P.R. Discussion Papers - 2007

This paper analyzes the effect of creditor protection on the volatility of stock market returns. Our application of the Tobin’s q model predicts that credit protection reduces the probability of oscillations between binding and nonbinding states of the credit constraint, which result from...

Persistent link: https://www.econbiz.de/10005504268