relation between loan risk and collateral. Specifically, we posit that different economic characteristics or types of … collateral pledges may be associated with the empirical dominance of the four different risk-collateral channels implied by … economic theory. For our sample, collateral overall is associated with lower loan risk premiums and a higher probability of ex …

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 … private information about borrower risk that is unobserved by the lender. The data also include public information about …

extracting the full surplus from projects, so that she inefficiently rejects marginally profitable projects. Collateral mitigates … rejects. The model predicts that, controlling for observable borrower risk, collateralized loans are more likely to default ex … relatively smaller information advantage face higher collateral requirements, and that technological innovations that narrow the …

In the aftermath of the global financial crisis, the market for unsecured credit literally dried out and collateral … than using them as collateral. The aim of this paper is to develop a non-equivalence between secured credit and outright … as collateral is a best response. …

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 …

In theory, the use of collateral in credit contracting should mitigate the information problems that are widely held to … be the primary cause of credit rationing. However, direct empirical evidence of the link between collateral use and … credit rationing is scant. This paper examines the relationship between collateral and credit rationing using survey data …

type of collateral that is comparable to the floating lien. We explore this natural experiment to identify how collateral …-in-differences approach, we find that following the change in the law and the loss in collateral value borrowers pay a higher interest rate on … credit by their bank. The reduction in collateral value also precedes a decrease in bank monitoring intensity and frequency …

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 … private information about borrower risk that is unobserved by the lender. The data also include public information about …

are better able to evaluate a project's risk than entrepreneurs. We study the bank's choice between screening and … competition on this choice. We find that competing banks use collateral less often than a monopolistic bank because competition …