prepayment penalties allow lenders to lower mortgage rates and extend credit to the least creditworthy, with the largest benefits … going to the riskiest borrowers, who have the most incentive to refinance in response to positive credit shocks. Empirical … access to credit and raising rates for the least creditworthy borrowers. …

Many observers have argued that credit default swaps contributed significantly to the credit crisis. Of particular … concern to these observers are that credit default swaps trade in the largely unregulated over-the-counter market as bilateral … strength. Some observers have suggested that credit default swaps would not have made the crisis worse had they been traded on …

This paper develops a model of a self-fulfilling credit market freeze and uses it to study alternative governmental … ability of other operating firms to obtain financing. In such an economy, an inefficient credit market freeze may arise in … getting an economy out of an inefficient credit market freeze. In particular, we study the effectiveness of interest rate cuts …