In his basic model of debt renegotiation, BESTER [1994] argues that collateral is more effective if high risk projects …, the probability of default has no impact on the collateral's effectiveness. Moreover, a higher risk of the project caused … are financed. This result, however, crucially depends on the definition of risk. Using the second-order stochastic …

In his basic model of debt renegotiation, BESTER [1994] argues that collateral is more effective if high risk projects …, the probability of default has no impact on the collateral's effectiveness. Moreover, a higher risk of the project caused … by a higher loss given default makes the use of collateral even less effective. -- Debt renegotiation ; Collateral ; Risk …

In his basic model of debt renegotiation, Bester (1994) argues that collateral is more effective if high risk projects …, the probability of default has no impact on the collateral's effective-ness. Moreover, an increasing risk of the project … are financed. This result, however, cru-cially depends on the definition of risk. Using the second-order stochastic …

; Transaction Costs ; Criteria for Decision-Making under Risk and Uncertainty ; Asymmetric and Private Information ; Intertemporal …

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 …

and risk-shifting in loan contracts. Our contribution reveals that collateral does not necessarily solve for the asset …We explore the determinants of liquidation values of collateral, focusing on the potential buyers of assets. When a fi …

borrower quality is fixed and collateral quality is known. Holding all risk factors constant except collateral quality, we show … suggest that maturity is not lenders' primary risk management tool. Holding loan quality constant (including collateral), we … that loans on riskier collateral have higher spreads, that is, they remain riskier even though lenders require higher …

results suggest that by combining collateral appropriately with interest rate, borrowers with different risk levels are … separated: high-risk borrowers accept loans without collateral and with high interest rates, whereas low-risk borrowers accept … practice of screening borrowers by risk level has become a paramount consideration for both lenders and firms. This paper …

We study theoretically and empirically the demand for micro-credit under different liability arrangements and risk …-liability loans when risk-averse borrowers value their long-term relationship with the lender. Joint liability then offers a way to … diversify risk and to reduce the chance of losing access to future loans. We also show that the demand for loans depends …

This paper analyses the exposure to climate risk of ABS, an asset class frequently pledged as collateral in the … and Medium Enterprises (SMEs) and explores ways to measure their climate risk based on the characteristics of the … computation of ABS climate related risk proxies. Without necessarily being able to measure a concrete impact, we carved a series …