Are close, long-term relationships between borrowers and lenders feasible in an increasingly competitive financial marketplace? How do relationships that have developed between banks and firms change when firms gain access to alternative funding sources, especially public securities markets? Can...

Mitchell Berlin raises the question "Should Business Bankruptcy Be a One-Chapter Book?" The answer, in part, depends on the answers to other questions: What makes more economic sense? A bankruptcy system that auctions a firm's assets and distributes the proceeds among the creditors? Or one that...

Trade credit remains the single largest source of short-term business credit in the United States and other nations around the world. Why do production firms act as financial intermediaries - a role usually reserved for banks? In "Trade Credit: Why Do Production Firms Act as Financial...

On September 22-23, 2011, the Research Department and the Payment Cards Center of the Federal Reserve Bank of Philadelphia held their sixth joint conference to present and discuss the latest research on consumer credit and payments. Eighty-four participants attended the conference, which...

In traditional banking arrangements, households hold their savings in the form of deposits at the bank, which makes loans to both firms and households and holds these loans to maturity. But in the United States, and to a lesser extent in other developed countries, markets have increasingly taken...

Mitchell Berlin discusses recent theories of how firms choose their debt maturity. Some of these theories are very useful for explaining how chief financial officers (CFOs) choose the maturity of their firms’ debt. However, CFOs seem to believe that they can predict future interest rates and...

A firm’s passage from borrowing from a single lender to using multiple lenders is often viewed as an inevitable progression in the life of a firm. While there is a strong element of truth in this view, it is also incomplete. The underlying economics of moving from one lender to many involves...

Mitchell Berlin examines disclosure requirements for banks. Can market participants play a significant role in ensuring that banks limit their risk-taking? Although regulators find this idea increasingly attractive, economists generally have two schools of thought: Such monitoring could...