This paper studies the effects of making corporate sector assets eligible as collateral for central bank borrowing. Banks are willing to pay collateral premia on assets if they become eligible as collateral. Collateral premia make debt financing cheaper for eligible firms, which respond by...

In many Asian countries, government institutions have played an important role in guaranteeing SME loans. Nevertheless, they have also exhibited lacklustre operating profits in recent years. Two episodes of failures involving companies offering credit guarantees highlight the importance of...