Quantity rationing of credit, when firms are denied loans, has greater potential to explain macroeconomic fluctuations … than borrowing costs. This paper develops a DSGE model with both types of financial frictions. A deterioration in credit … receiving financing, which leads to a persistent fall in real activity. Empirical evidence confirms that credit market …

authorities. Thus both a credit crunch due to lack of capital and "excessive" risky lending due to moral hazard can obtain in a … to meet the requirement is sufficiently penalized. The model suggests that the mutually exclusive hypotheses of credit …

The paper examines the determination of bank lending during the Finnish credit boom of 1986–1990 with the data of 483 …

on the other hand. The findings do not support the hypothesis of a general credit crunch caused by capital insufficiency … weak capital contributed positively to credit growth of some subset of banks in 1992. This moral hazard behaviour differs … resurrection" were not the weakest banks in terms of capitalization or credit riksks, but more in the middle of the spectrum: not …

useful for estimating recovery rates required by many popular models of credit risk and for determining collateral haircuts …