Hidden Bibliographic Details
| Other authors / contributors: | International Monetary Fund. Western Hemisphere Department, issuing body.
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| ISBN: | 1283518147
9781283518147
9781451907773
145190777X
1462343767
9781462343768
145278244X
9781452782447
9786613830593
6613830593
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| Notes: | Includes bibliographical references.
English.
Print version record.
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| Summary: | The paper proposes a theoretical argument on the nature of bank lending, based on the idea that, through commitment and monitoring, banks overcome basic informational asymmetries with borrowers. By bringing together loan commitment theories and credit rationing theories, the paper shows that, within a framework of asymmetric information between lenders and borrowers and under costly termination of lending arrangements, commitment may explain the accumulation of nonperforming loans by banks. Two additional results follow: (i) that banks favor borrowers with well-known production functions and long-term credit history; and (ii) that interest rate spreads may be large if significant market imperfections prevail.
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| Other form: | Print version: Blavy, Rodolphe. Monitoring and commitment in bank lending behavior. [Washington, D.C] : International Monetary Fund, Western Hemisphere Dept., 2005
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