market equilibria in which cheap credit is inappropriately emphasized over project screening. Restrictions on collateral …Many economists argue that the primary economic function of banks is to provide cheap credit, and to facilitate this … requirements and the protection of debtors in bankruptcy proceedings may redress this imbalance and increase credit …

This paper studies a credit market with adverse selection and moral hazard where sufficient sorting is impossible. The … credit markets which do not occur when a bank has a monopoly. First, average returns decrease since banks compete for good … banking in the United States. Finally, allowing for random delivery on credit contracts leads to a breakdown since all banks …

intermediation in a model with moral hazard. Entreprenuers can simultaneously get credit from two types of competing institutions … credit risks, and the latter have superior information about the investment returns of a ‘nearby’ entrepreneur. This …

trade credit. The common feature of all financial theories is that suppliers have an advantage over other lenders in … financing credit-constrained firms. While the reasons for the financing advantage differ across theories, they are usually … insight to analyse the trade credit volume and the contract terms. Our analysis suggests that the most important product …