Monitoring and commitment in bank lending behavior /

Monitoring and commitment in bank lending behavior /

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Bibliographic Details
Author / Creator:	Blavy, Rodolphe, author.
Imprint:	Washington, D.C. : International Monetary Fund, Western Hemisphere Dept., 2005.
Description:	1 online resource (32 pages)
Language:	English
Series:	IMF working paper ; WP/05/222 IMF working paper ; WP/05/222.
Subject:	Bank loans -- Econometric models. Banks and banking. Bank loans -- Econometric models. Banks and banking.
Format:	E-Resource Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/12498717

Hidden Bibliographic Details
Other authors / contributors:	International Monetary Fund. Western Hemisphere Department, issuing body.
ISBN:	1283518147 9781283518147 9781451907773 145190777X 1462343767 9781462343768 145278244X 9781452782447 9786613830593 6613830593
Notes:	Includes bibliographical references. English. Print version record.
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.
Other form:	Print version: Blavy, Rodolphe. Monitoring and commitment in bank lending behavior. [Washington, D.C] : International Monetary Fund, Western Hemisphere Dept., 2005

Table of Contents:

Contents
I. INTRODUCTION
II. CONCEPTS, DEFINITIONS, AND THEORETICAL FRAMEWORK
III. MONITORING AND BANK LENDING
IV. TERMINATION COSTS AND COMMITMENT IN BANK LENDING
V. MONITORING AND COMMITMENT WITH CREDIT HISTORY
VI. CONCLUSIONS
Appendix. Implicit Commitment with Credit History: Formalization
REFERENCES