Optimum pricing of mutual guarantees for credit

Autor:	Yoram Kroll, Assaf Cohen
Rok vydání:	2012
Předmět:	Finance Economics and Econometrics Moral hazard business.industry media_common.quotation_subject Financial market Equity (finance) General Business Management and Accounting Profit (economics) Mutual credit Microeconomics Information asymmetry Credit history Debt Economics business media_common
Zdroj:	Small Business Economics. 41:253-262
ISSN:	1573-0913 0921-898X
Popis:	The main finding of this paper is that under financial market impediments and asymmetric information, a mutually guaranteed and correctly schemed and priced insurance credit contract should have an abnormal actuarial profit. Such a contract improves welfare by simultaneously eliminating underinvestment (UI) and overinvestment (OI) and by reducing the probability of the insurer’s ruin. This solution is relevant for mutual credit insurance agencies and international or governmental agencies interested in increasing the value creation of small and medium enterprises that suffer from limited access to equity and debt markets.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::b00c0f973298ff0d54e5c384caad7e89 https://doi.org/10.1007/s11187-012-9430-3 Zobrazit plný text záznamu Full text from SpringerLink