English
 
Help Privacy Policy Disclaimer
  Advanced SearchBrowse

Item

ITEM ACTIONSEXPORT
  Credit Risk Transfer and Bank Competition

Hakenes, H., & Schnabel, I. (2009). Credit Risk Transfer and Bank Competition.

Item is

Files

show Files

Locators

show
hide
Description:
-

Creators

show
hide
 Creators:
Hakenes, Hendrik1, Author              
Schnabel, Isabel1, Author              
Affiliations:
1Max Planck Institute for Research on Collective Goods, Max Planck Society, ou_2173688              

Content

show
hide
Free keywords: -
 Abstract: We present a banking model with imperfect competition in which borrowers’ access to credit is improved when banks are able to transfer credit risks. However, the market for credit risk transfer (CRT) works smoothly only if the quality of loans is public information. If the quality of loans is private information, banks have an incentive to grant unprofitable loans in order to transfer them to other parties, leading to an increase in aggregate risk. Nevertheless, the introduction of CRT generally increases welfare in our setup. However, under private information, higher competition induces an expansion of loans to unprofitable firms, which in the limit offsets the welfare gains from CRT completely.

Details

show
hide
Language(s):
 Dates: 2009
 Publication Status: Published in print
 Pages: -
 Publishing info: Bonn : Max Planck Institute for Research on Collective Goods
 Table of Contents: -
 Rev. Type: -
 Identifiers: Other: 2009/33
 Degree: -

Event

show

Legal Case

show

Project information

show

Source

show