Credit rationing and the use of collateral are widely observed in debt financing. To our view there is yet no appropriate theoretical explanation for these facts. In the standard debt financing models the occurrence of credit rationing can be explained based on suitable assumptions. But those...

Significant differences in loan terms between demographically distinct groups of borrowers in the United States are often interpreted as evidence of systematic ethnic, racial or gender discrimination by lenders. The appearance and interpretation of such discrimination has long been a...