Collateral is at the heart of modern financial system and plays an essential role in business and financial cycles …. Leveraging detailed loan level data covering a major city in China, the paper is among the first to provide stylized facts on … Chinese bank loan collateral structure. It shows that facing the tension between heightened uncertainty and government mandate …

-lending revenues, and those that pledge collateral, especially outside assets and real estate, experience less credit rationing …

to smooth consumption over time and because they provide collateral and liquidity services. We characterize a recursive … and contemporaneous costs due to lost collateral and liquidity are essential to generate these empirically plausible …