Lensink, Robert; Sterken, Elmer - In: Journal of Money, Credit and Banking 34 (2002) 1, pp. 221-25
Stiglitz and Weiss (1981) show that firms considering risky projects have higher reservation interest rates and hence it is optimal for a bank to reduce loan supply. In this note we show that when the risk involved in an investment will be resolved in the future, investors with riskier projects...