loans. This practice has an adverse effect on commercial banks' monitoring incentives, encouraging the pursuit of private …

We study the welfare implications of market power in a model where banks choose between credit rationing and monitoring … power induces banks to exert higher monitoring effort and reduces the frequency of credit rationing. Whenever the second …

This paper analyzes central bank policies on monitoring banks in distress when liquidity provisions are conditional on … with discretion and the second in which the optimal monitoring policy rule is made public. The results show that banks … exert less effort and take higher risks with discretionary monitoring policy. With public information about monitoring rules …

-ante regime of policy intervention involving conditional monitoring can prevent bank crises. …

between two second-best alternative devices: costly monitoring and credit rationing. We show that investment depends on both … the lending rate and the information structure. Since monitoring incentives increase with interest rate margins, the …

members have better information about each other compared to lenders, peer monitoring is often less expensive than lender … monitoring. Theoretically this leads to greater monitoring and greater rates of loan repayments. This paper reports the results … from a laboratory experiment of group lending in the presence of moral hazard and (costly) peer monitoring. We compare peer …

hazard and (costly) peer monitoring. We compare peer monitoring treatments in which credit is provided to members of the … group to individual lending treatments with lender monitoring. We find that if the cost of peer monitoring is lower than the … cost of lender monitoring, peer monitoring results in higher loan frequencies, higher monitoring and higher repayment rates …

This study discusses the effects of financial intermediation, banks’ moral hazard and monitoring on monetary policy … transmission in a simple model where borrowers are dependent on loans granted by banks with superior monitoring skills. As distinct … for their special role in the monetary transmission. Instead, we focus on banks’ role in monitoring their loan customers …