Lending Technologies and Lending Relationships

Autor:	Bogdan Stacescu, Artashes Karapetyan
Rok vydání:	2018
Předmět:	Competition (economics) Collateral Loan media_common.quotation_subject SAFER Business Monetary economics Economic surplus Selection (genetic algorithm) Preference Interest rate media_common
Zdroj:	SSRN Electronic Journal.
ISSN:	1556-5068
DOI:	10.2139/ssrn.3190551
Popis:	We examine banks' choice between two costly instruments used to identify good loan applicants: direct screening by acquiring borrower-specific information and collateral requirements. We show that with longer relationships the preference for screening increases both in initial and in later periods. Total welfare is enhanced as a result of more efficient selection, and access to credit can be improved. The model explains the reduced incidence of collateral, and potentially higher interest rates in later periods for safer borrowers. The results are stronger under more intense bank competition. Our findings support policies conducive to enduring lending relationships.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::0206a11cd4e8ccd7961387681dd96b04 https://doi.org/10.2139/ssrn.3190551 Zobrazit plný text záznamu