Multiple Bank Lending, Creditor Rights, and Information Sharing

Marco Pagano, Salvatore Piccolo, Alberto Bennardo

Risultato della ricerca: Contributo in rivistaArticolo in rivista

29 Citazioni (Scopus)

Abstract

Multiple bank lending induces borrowers to take too much debt when creditor rights are poorly protected; moreover, banks wish to engage in opportunistic lending at their competitors’ expenses if borrowers’ collateral is sufficiently risky. These incentives lead to credit rationing and positive-profit interest rates, possibly exceeding the monopoly level. If banks share information about past debts and seniority via credit reporting systems, the incentive to overborrow is mitigated: interest and default rates decrease; credit access improves if the value of collateral is not very volatile, but worsens otherwise. Recent empirical studies report evidence consistent with these predictions. The article also shows that private and social incentives to share information are not necessarily aligned.
Lingua originaleEnglish
pagine (da-a)519-570
Numero di pagine52
RivistaReview of Finance
Volume19
DOI
Stato di pubblicazionePubblicato - 2014

Keywords

  • common agency
  • information sharing
  • multiple-bank lending
  • rationing

Fingerprint Entra nei temi di ricerca di 'Multiple Bank Lending, Creditor Rights, and Information Sharing'. Insieme formano una fingerprint unica.

Cita questo