Showing 1 - 10 of 899,870
We show that lenders join a U.S. commercial credit bureau when information asymmetries between incumbents and entrants … create an adverse selection problem that hinders market entry. Lenders also delay joining when information asymmetries … competition. We exploit shocks to information coverage to show that lenders enter new markets after joining the bureau in a …
Persistent link: https://www.econbiz.de/10011960063
adverse selection (AS). In particular, we study how the level of such exemption affects the role of collateral depending on … the dominant source of asymmetric information. Under MH, conditional on the level of exemption, the cost of credit is … higher for borrowers who are requested to post collateral. Moreover, conditional on posting collateral, the cost of credit …
Persistent link: https://www.econbiz.de/10012862259
We explore whether behavioral biases impede the effective processing and interpretation of soft information in private …) common identity. Specifically, we find that using soft information in lending decisions leads to worse loan quality when loan … information in lending decisions …
Persistent link: https://www.econbiz.de/10011931483
Relationship lending has an advantage over transactions-based lending from the viewpoint of information richness … officer has an incentive to shirk if his monitoring activity is not observable and the information that is produced by …
Persistent link: https://www.econbiz.de/10013321760
We study specialized lending in a credit market competition model with private information. Two banks, equipped with … similar data processing systems, possess "general" signals regarding the borrower's quality. However, the specialized bank … based on its specialized signal conditional on making a loan. This private-information-based pricing helps deliver the …
Persistent link: https://www.econbiz.de/10014486246
economic theory. For our sample, collateral overall is associated with lower loan risk premiums and a higher probability of ex … strong for residential real estate collateral and that the risk shifting effect is important for pledged deposits and bank … relation between loan risk and collateral. Specifically, we posit that different economic characteristics or types of …
Persistent link: https://www.econbiz.de/10012972883
the empirical dominance of different risk-collateral channels implied by economic theory, namely the “lender selection … relation between collateral and loan risk. We posit that certain economic characteristics of collateral may be associated with … regarding the empirical relations between collateral and loan risk. For our sample of commercial loans, we find that the “lender …
Persistent link: https://www.econbiz.de/10013100344
inclined to pledge outside collateral than is the low-risk borrower. However, this finding does not hold when the bank can …Within a framework of debt renegotiation and a priori private information, what is the role of outside and inside … collateral? The literature shows that unobservability of the project’s returns implies that the high-risk borrower is more …
Persistent link: https://www.econbiz.de/10011489185
identified in the theoretical literature: verifiability of information, bank size and complexity, and bank competition. We extend …This paper investigates whether the benefits of bank–borrower relationships differ depending on three factors … the benefits from stronger bank–borrower relationships in terms of credit availability are limited to smaller banks …
Persistent link: https://www.econbiz.de/10012975564
We studied information and interaction processes in six lending relationships between a universal bank and medium sized …, bank monitoring is based mainly on cheap, retrospective and internal data. In case of distress, more expensive, prospective … and external information is used. The level of monitoring and the willingness to renegotiate the lending relationship …
Persistent link: https://www.econbiz.de/10009768853