relation between loan risk and collateral. Specifically, we posit that different economic characteristics or types of … collateral pledges may be associated with the empirical dominance of the four different risk-collateral channels implied by … economic theory. For our sample, collateral overall is associated with lower loan risk premiums and a higher probability of ex …

An important theoretical literature motivates collateral as a mechanism that mitigates adverse selection, credit … incidence of collateral. We exploit exogenous variation in lender information related to the adoption of an information … technology that reduces ex ante private information, and compare collateral outcomes before and after adoption. Our results are …

Collateral is a widely used, but not well understood, debt-contracting feature. Two broad strands of theoretical … literature explain collateral as arising from the existence of either ex ante private information or ex post incentive problems … ex post theories of collateral are empirically dominant although the ex ante theories are also valid for customers with …

In the aftermath of the global financial crisis, the market for unsecured credit literally dried out and collateral … than using them as collateral. The aim of this paper is to develop a non-equivalence between secured credit and outright … as collateral is a best response. …

In theory, the use of collateral in credit contracting should mitigate the information problems that are widely held to … be the primary cause of credit rationing. However, direct empirical evidence of the link between collateral use and … credit rationing is scant. This paper examines the relationship between collateral and credit rationing using survey data …

potential borrowers. Banks can screen their borrowers, or can require them to post collateral in order to select creditworthy … posting collateral only provides the information that the current project of a given borrower is of good quality, whereas …

Information sharing and collateral reduce adverse selection costs, but are costly for lenders. When a bank learns more … information should substitute the role of collateral in screening their types. We instead show that information sharing may … increase, rather than decrease, the role of collateral, which can be required in loans to high-risk borrowers in cases when it …