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 … secured debt became the most widely used concept to coinsure against liquidity shocks. However, since financial assets are … than using them as collateral. The aim of this paper is to develop a non-equivalence between secured credit and outright …

illiquid but solvent borrowers only) against the security of sound collateral and at above-market, penalty interest rates. Deny … classicals, the Fed filled the market with liquidity while lending to a wide variety of borrowers on an extended array of assets … tarnished collateral and/or purchasing assets of questionable value, in bailing out insolvent borrowers, in extending its …

We identify frictions in the market for liquidity as well as bank-specific and market-wide factors that affect the … prices that banks pay for liquidity, captured here by borrowing rates in repos with the central bank and benchmarked by the … liquidity. We find that the price a bank pays for liquidity depends on the liquidity positions of other banks, as well as its …

housing is accepted as collateral. A calibration to the U.S. economy supports the theoretical results and provides novel …