Suchergebnisse

We study a simple, solvable model that allows us to investigate effects of credit contagion on the default probability of individual firms, in both portfolios of firms and on an economy wide scale.
While the effect of interactions may be small in typical (most probable) scenarios they are magnified, due to feedback, by situations of economic stress, which in turn leads to fatter tails
in loss distributions of large loan portfolios.

We develop a simple macroeconomic model of credit market imperfections with heterogeneous investment projects. The projects differ in productivity, the investment requirement, and the severity of agency problems behind the borrowing constraints. A movement in borrower net worth shifts the composition of the credit between projects with different productivity levels, thereby causing endogenous investment-specific technological change. Furthermore, such endogenous technological change in turn affects borrower net worth. These composition effects could give rise to credit traps, credit collapse, leapfrogging, credit cycles, and growth miracles in the dynamics of the aggregate investment and borrower net worth. (JEL E22, E44, O33)

The research investigates the determinants and impact of bank credit on output in the food crops and fisheries sub sectors; whether or not there is a significant difference in the risk on bank credit and output in the two sub sectors, and whether or not there is a relationship between risk obtaining in the two sub sectors. The results indicate the positive and significant influence of bank credit on food crops output, but a positive and insignificant influence on fisheries output, which unequivocally vindicates government intervention in credit disbursement to agriculture. The influence of banking deregulation on bank credit supply is shown to differ between the two sub sectors, for while it registers expected positive sign in the fisheries sub sector, it produces negative and insignificant influence in the food crops sub sector. Bank reserve requirements has a negative influence on bank credit extended to the fisheries sub sector, while it induces a positive and significant influence in the food crops sub sector. The 1997 economic crisis causes an autonomous contraction of bank credit to the food crops sub sector, but accentuates it in the fisheries sub sector. The food crops and fisheries sub sectors register significant influence of rate of interest rate on bank credit on bank credit supply. Obstacles to credit disbursement to the two sub sectors are presented, followed by policy implications deemed necessary to improve the credit situation in the agricultural sector.

Since the early 1990s, credit expanded relative to income, especially after 2001. It is hypothesized that traditionally uneven credit access and gaps in the costs of credit by demographic characteristics shrank during this period. Relying on data from the Federal Reserve's Survey of Consumer Finance, this study looks at financial constraints, the costs of credit and a number of contributions to the costs of credit, including sources and types of loans. The results indicate that taste-based discrimination and structural discrimination may have persisted and possibly increased over time. Gaps in credit access and costs of credit have widened by race, remained high by income, but shrank by ethnicity. Part of the overall differences in credit access was a varying reliance on professional information when making decisions on debt.