Does the Church Tower Principle, i.e. geographical proximity between borrowing firm and lending bank, matter in credit risk management? If so, the bank might expose itself to a greater risk by lending to distant firms and should therefore respond by rationing them harder. In this paper we...

Which projects/firms should be the target of lending by a Public Development Bank (PDB)? What is the optimal design for the PDB's loans, and the optimal structure for delivering them? We analyze these questions in the context of a model where screening is costly to banks and underprovision of...