Information sharing and collateral reduce adverse selection costs, but are costly for lenders. When a bank learns more … information should substitute the role of collateral in screening their types. We instead show that information sharing may … increase, rather than decrease, the role of collateral, which can be required in loans to high-risk borrowers in cases when it …

bank's choice of collateral standards in its lending facilities. Optimism on the side of banks, entailing a higher … collateral value of bank loans, can lead to excessive lending and bank default. Pessimism, though, can entail insufficient … lending and productivity losses. With an appropriate haircut on collateral, the central bank can perfectly neutralize the …

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 …

on the economic growth in this region. -- financing of small and medium-sized enterprises ; credit rationing ; collateral …

Collateral is a widely used, but not well understood, debt-contracting feature. Two broad strands of theoretical … literature explain collateral as arising from the existence of either ex ante private information or ex post incentive problems … ex post theories of collateral are empirically dominant although the ex ante theories are also valid for customers with …

-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 …