We identify the origin of the contradicting perspectives on credit creation offered by Austrian, Mainstream and Post …-exist any transaction and loan. We develop a unified framework of credit creation based on three leading variables: (i) the … amount of collateral assets accepted, (ii) the level of leverage and (iii) the level of trust and confidence. As credit …

Using a new structural model of credit risk based on the normal instead of the lognormal firm value dynamics and market … price implied asset value volatility as the model volatility input, we quantify the value of credit spreads of the four … financial crises of 2008-2009 and 2011, the maximum 5-year bank credit spread among the four largest banks was over 400 basis …

minimum interest rate on these otherwise floating rate loans. This contract design is consistent with theory that suggests … participated in floor-adjusted credit lines had noninterest expense rates 10-20 bps higher than did banks in purely floating rate … facilities. Demand for floors appears to originate from the supply of credit as borrowers seeking to extend loans between 2005 …