lending, borrower quality and collateral as a key variable in loan contract design. We used a unique data set based on the … borrower quality and the incidence or degree of collateralization. Our results indicate that the use of collateral in loan … housebanks do require more collateral from their debtors, thereby increasing the borrower's lock-in and strengthening the banks …

We establish that a monopoly bank never uses collateral as a screening device. A pooling equilibrium always exists in … which all borrowers pay the same interest rate and put zero collateral. Absence of screening leads to socially inefficient …

-dependent returns and reservation utility creates a situation where collateral alone is not sufficient to screen entrepreneurs, and the …

-participant default, the collateral pledged by direct members of the system would be sufficient to cover the largest possible net debit … default. Their analysis includes the impact of a decline in value of LVTS collateral following an unexpected default …-of-day collateral shortfalls, but only rarely and in small amounts. Under the two-participant default scenario, the likelihood of the …

competition on this choice. We find that competing banks use collateral less often than a monopolistic bank because competition …