The ex ante theory of collateral states that better informed lenders, such as informal lenders, rely less on collateral …. We test this by contrasting the use of collateral between formal and informal lenders in the same market. Indeed, formal … lenders rely more often on collateral, controlling for conventional determinants of collateral. Moreover, better information …

of collateral in a trade to mitigate the counterparty credit risk. Another is the realization that banks are not risk … adjustment to derivative prices, known as a funding value adjustment (FVA), which is interlinked with the posting of collateral …. In this paper, we extend the Cox, Ross and Rubinstein (CRR) discrete-time model to include collateral and FVA. We prove …

Central banks normally accept debt of their own governments as collateral in liquidity operations without reservations …'s collateral framework can give rise to cliff effects and multiple equilibria in bond yields and increase the vulnerability of …

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 …