This paper provides new empirical evidence on the reasons why French banks use collateral. We test the relevance of the … collaterals. We then show that collateral reduces loan loss in the event of default with major differences between collaterals in … terms of magnitude of the reduction. Furthermore our results reject the view that collateral would help to solve adverse …

We investigate the impact of bank competition on the use of collateral in loan contracts. We analyze asymmetric … collateral. We show that the presence of collateral is more likely when bank competition is low. We then test this prediction … empirically on a sample of bank loans from 70 countries. We perform logit regressions of the presence of collateral on bank …

This paper aims at testing empirically the three major theoretical reasons why banks resort to collateral: reduction of … the reasons vary according to the type of collateral. We use a unique dataset of bank loans granted to French distressed … of the bank to secure a loan, as no type of collateral helps to solve adverse selection and moral hazard problems. The …

We investigate whether collateral helps to solve adverse selection problems. Theory predicts a negative relationship … between presence of collateral and risk premium, as collateral constitutes a signalling instrument for the borrower to be … collateral and risk premium. We include five proxies for the degree of information asymmetries, measuring opacity of financial …

We investigate the impact of bank competition on the use of collateral in loan contracts. We develop a theoretical … borrower and asking for collateral. We show that the presence of collateral is more likely when bank competition is low. We … presence of collateral on bank competition, measured by the Lerner index. Our empirical tests corroborate the theoretical …

We examine why banks resort to collateral, and whether their reasons vary according to the type of collateral. We use a … decision of the bank to secure a loan, as no type of collateral helps to solve adverse selection and moral hazard problems. The … reduction of the loan loss and the observed-risk hypothesis may however explain the use of collateral. …

We investigate the impact of bank competition on the use of collateral in loan contracts. We develop a theoretical … borrower and asking for collateral. We show that presence of collateral is more likely when bank competition is low. We then … of collateral is regressed on bank competition, measured by the Lerner index. Our empirical tests corroborate the …