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Asymmetric information and the securitization of SME loans
Albertazzi, Ugo; Bottero, Margherita; Gambacorta, Leonardo - 2021
Using all loans granted to firms recorded in the Italian credit register, we estimate correlations between risk-transfer and default probabilities to gauge the severity of informational asymmetries in the loan securitization market. First, the analysis confirms the presence of information...
Persistent link: https://www.econbiz.de/10012487672
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Selection, Leverage, and Default in the Mortgage Market
Gupta, Arpit - 2020
We ask whether the correlation between mortgage leverage and default is due to moral hazard (the causal effect of …
Persistent link: https://www.econbiz.de/10012850423
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Adverse Selection in Insurance Markets : On-Demand Contracts As a Screening Device
Braun, Alexander - 2020
We show that on-demand insurance contracts, an innovative form of coverage recently introduced through the InsurTech sector, can serve as a screening device. To this end, we develop a new adverse selection model consistent with Wilson (1977), Miyazaki (1977) and Spence (1978). Consumers have...
Persistent link: https://www.econbiz.de/10012822927
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Birds of a Feather : The Impact of Homophily on the Propensity to Follow Financial Advice
Stolper, Oscar Anselm - 2018
Homophily — individuals' affinity for others like them — is a powerful principle which governs whose opinions they attend to. Using nearly 2,400 advisory meetings, we find that homophily has a significant positive impact on the likelihood of following financial advice. The increased...
Persistent link: https://www.econbiz.de/10012934473
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Unconventional credit policy in an economy under zero lower bound
Pozo, Jorge; Rojas, Youel - 2021
In this paper we develop a simple two-period model that reconciles credit demand and supply frictions. In this stylized but realistic model credit and deposit markets are interlinked and credit demand and credit supply frictions amplify each other in such a way that produces in equilibrium very...
Persistent link: https://www.econbiz.de/10012590148
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Why bank money creation?
Gersbach, Hans; Zelzner, Sebastian - 2022 - This version: April 20, 2022
We provide a rationale for bank money creation in our current monetary system by investigating its merits over a system with banks as intermediaries of loanable funds. The latter system could result when CBDCs are introduced. In the loanable funds system, households limit banks' leverage ratios...
Persistent link: https://www.econbiz.de/10013187924
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Informed principals in the credit market when borrowers and lenders are heterogeneous
Barigozzi, Francesca; Tedeschi, Piero - 2016
Both borrowers and lenders can be socially responsible (SR). Ethical banks commit to financing only ethical projects, which have social profitability but lower expected revenues than standard projects. Instead, no credible commitment exists for SR borrowers. The matching between SR borrowers and...
Persistent link: https://www.econbiz.de/10011705659
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Still Waiting for Mister Right? Asymmetric Information, Abortion Laws and the Timing of Marriage
Bowmaker, Simon W. - 2009
hypothesis. This paper presents an alternative theory of abortion access and marriage based on asymmetric information, which …Previous studies have suggested that more liberal abortion laws should lead to a decrease in marriage rates among young … suggests that more liberal abortion laws may actually promote young marriage. An empirical examination of marriage data from …
Persistent link: https://www.econbiz.de/10013159512
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Still waiting for mister right? : asymmetric information, abortion laws and the timing of marriage
Bowmaker, Simon W.; Emerson, Patrick M. - 2009
hypothesis. This paper presents an alternative theory of abortion access and marriage based on asymmetric information, which …Previous studies have suggested that more liberal abortion laws should lead to a decrease in marriage rates among young … suggests that more liberal abortion laws may actually promote young marriage. An empirical examination of marriage data from …
Persistent link: https://www.econbiz.de/10003846011
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Securitization and moral hazard : evidence from a lender cutoff rule
Bubb, Ryan; Kaufman, Alex - 2009
Credit score cutoff rules result in very similar potential borrowers being treated differently by mortgage lenders … perapplicant fixed costs in screening. We then demonstrate that our theory fits the data better than the main alternative theory … already in the literature, which supposes cutoff rules are exogenously used by securitizers. Furthermore, we use our theory to …
Persistent link: https://www.econbiz.de/10003941871