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Collaterals
Kinds of Collaterals Terms modified by Collaterals Selected AbstractsLAND PRICE, COLLATERAL AND ECONOMIC GROWTH,THE JAPANESE ECONOMIC REVIEW, Issue 4 2009MASAYA SAKURAGAWA This paper extends Kiyotaki and Moore's (1997) to an endogenous growth model and investigates the dynamic properties of a growing economy with binding credit constraint when land is used not only as an input of production but also as collateral. There exists a balanced growth path in an economy with binding credit constraint. In response to a once and for all productivity shock, the developed model shows the propagation mechanism among output, capital, bank credit and the land price in terms of the growth rate. The model's tractability allows us to derive interesting qualitative and quantitative findings on business cycles. [source] Heart Failure and Diabetes: Collateral Benefit of Chronic Disease ManagementCONGESTIVE HEART FAILURE, Issue 3 2006Molly G. Ware MD To test the hypothesis that a focus on heart failure (HF) care may be associated with inadequate diabetes care, the authors screened 78 patients (aged 64±11 years; 69% male) with diabetes enrolled in an HF disease management program for diabetes care as recommended by the American Diabetes Association (ADA). Ninety-five percent of patients had hemoglobin A1c levels measured within 12 months, and 71% monitored their glucose at least once daily. Most patients received counseling regarding diabetic diet and exercise, and approximately 80% reported receiving regular eye and foot examinations. Mean hemoglobin A1c level was 7.8±1.9%. There was no relationship between hemoglobin A1c levels and New York Heart Association class or history of HF hospitalizations. Contrary to the authors' hypothesis, patients in an HF disease management program demonstrated levels of diabetic care close to ADA goals. "Collateral benefit" of HF disease management may contribute to improved patient outcomes in diabetic patients with HF. [source] On the Use of CollateralJOURNAL OF ECONOMIC SURVEYS, Issue 2 2000Giuseppe Coco This paper surveys existing explanations for the pervasive use of collateral in credit markets and relates them to the empirical evidence on the subject. Collateral may be used as a screening or an incentive device in markets characterized by various forms of asymmetric and biased information. The evidence is incompatible with the use of collateral as a signal of projects' quality, while broadly consistent with explanations based on its incentive properties and asymmetric evaluation of projects. [source] Local axon collaterals of lamina I projection neurons in the spinal cord of young ratsTHE JOURNAL OF COMPARATIVE NEUROLOGY, Issue 14 2010Peter Szucs lpsilateral spinal cord areas occupied by axon collaterals of different types of ALT projection neurons. Dorsal Collateral Type projection neurons (DCT-I and II, upper right and left corners; respectively) send axon collaterals into the dorsal laminae of the same segment and these axons may extend into the overlying white matter. The collateral area of Lateral Collateral Type (LCT) neurons (purple cell, lower left) extends beyond the segment of the neuron, includes the lateral spinal nucleus, a part of the dorsolateral funiculus and may include the lateral part of laminae I-V. Collaterals of Ventral Collateral Type (VCT) neurons (yellow cell, lower right) are occupying an area that could be best described as a transverse slice of the grey matter ventral to lamina IV, centered on the rostrocaudal position of the neuron soma. The Journal of Comparative Neurology, Volume 518, Number 14, pages 2645,2665. [source] The Agency Problems, Firm Performance and Monitoring Mechanisms: the evidence from collateralised shares in TaiwanCORPORATE GOVERNANCE, Issue 3 2004Lanfeng Kao This paper indicates that there is an inverse relationship between collateralised shares and firm performance. We further show that this inverse relationship exists only in conglomerate firms. These findings imply that agency problems resulting from shares used as collateral by boards of directors are more serious in conglomerate firms than in non-conglomerate firms. Moreover, we provide evidence that monitoring by institutional investors, creditors and dividend policy can effectively reduce the agency problems of shares used as collateral and thus can improve firm performance. [source] THE PROCYCLICAL LEVERAGE EFFECT OF COLLATERAL VALUE ON BANK LOANS,EVIDENCE FROM THE TRANSACTION DATA OF TAIWANECONOMIC INQUIRY, Issue 2 2007NAN-KUANG CHEN We investigated the empirical relationship between firms' collateral values and land-secured loans over asset price cycles. A simultaneous equation model of loan demand and supply was estimated using a transaction-level data set from Taiwan. The data set contains collateral information and identifies lenders and borrowers. We found that the value of collateralizable assets has positive and significant effects on loan amounts and that the leverage effect of collateral is procyclical to asset price cycles. Firms in the electronics industry, the star industry in the sample period, are found to borrow more than other firms do at each marginal dollar of collateral. (JEL C50, E30, G20) [source] Advancing Loss Given Default Prediction Models: How the Quiet Have QuickenedECONOMIC NOTES, Issue 2 2005Greg M. Gupton We describe LossCalcÔ version 2.0: the Moody's KMV model to predict loss given default (LGD), the equivalent of (1 , recovery rate). LossCalc is a statistical model that applies multiple predictive factors at different information levels: collateral, instrument, firm, industry, country and the macroeconomy to predict LGD. We find that distance-to-default measures (from the Moody's KMV structural model of default likelihood) compiled at both the industry and firm levels are predictive of LGD. We find that recovery rates worldwide are predictable within a common statistical framework, which suggests that the estimation of economic firm value (which is then available to allocate to claimants according to each country's bankruptcy laws) is a dominant step in LGD determination. LossCalc is built on a global dataset of 3,026 recovery observations for loans, bonds and preferred stock from 1981 to 2004. This dataset includes 1,424 defaults of both public and private firms , both rated and unrated instruments , in all industries. We demonstrate out-of-sample and out-of-time LGD model validation. The model significantly improves on the use of historical recovery averages to predict LGD. [source] Housing Wealth and UK ConsumptionECONOMIC OUTLOOK, Issue 4 2006Article first published online: 13 NOV 200 There is widespread disagreement about the role of housing wealth in explaining consumption. However, much of the empirical literature is marred by poor controls for the common drivers both of house prices and consumption, such as income, income growth expectations, interest rates, credit supply conditions, other assets and indicators of income uncertainty (e.g. changes in the unemployment rate). For instance, while the easing of credit supply conditions is usually followed by a house price boom, failure to control for the direct effect of credit liberalisation on consumption can over-estimate the effect of housing wealth or collateral on consumption. This paper (Janine Aron, John Muellbauer and Anthony Murphyi, October 2006) estimates an empirical model for UK consumption from 1972 to 2005, grounded in theory, and with more complete empirical controls than hitherto used. [source] The Effect of Venture Capital Financing on the Sensitivity to Cash Flow of Firm's InvestmentsEUROPEAN FINANCIAL MANAGEMENT, Issue 4 2010Fabio Bertoni G32; D92; G23 Abstract This work studies the effect of venture capital (VC) financing on firms' investments in a longitudinal sample of 379 Italian unlisted new-technology-based firms (NTBFs) observed over the 10-year period from 1994 to 2003. We distinguish the effects of VC financing according to the type of investor: independent VC (IVC) funds and corporate VC (CVC) investors. Previous studies argue that NTBFs are the firms most likely to be financially constrained. The technology-intensive nature of their activity and their lack of a track record increase adverse selection and moral hazard problems. Moreover, most of their assets are firm-specific or intangible and hence cannot be pledged as collateral. In accordance with this view, we show that the investment rate of NTBFs is strongly positively correlated with their current cash flows. We also find that after receiving VC financing, NTBFs increase their investment rate independently of the type of VC investor. However, the investments of CVC-backed firms remain sensitive to shocks in cash flows, whereas IVC-backed firms exhibit a low and statistically not significant investment,cash flow sensitivity that we interpret as a signal of the removal of financial constraints. [source] Incorporating Collateral Value Uncertainty in Loss Given Default Estimates and Loan-to-value RatiosEUROPEAN FINANCIAL MANAGEMENT, Issue 3 2003Esa Jokivuolle Abstract We present a model of risky debt in which collateral value is correlated with the possibility of default. The model is then used to study the expected loss given default, primarily as a function of collateral. The results obtained could prove useful for estimating losses given default in many popular models of credit risk which assume them constant. We also examine the problem of determining sufficient collateral to secure a loan to a desired extent. In addition to bank practitioners, regulators might find our analysis useful in reviewing banks' lending standards relative to current collateral values. In particular, the current proposals for The New (Basel) Capital Accord involve options for the use of banks' own loss given default estimates which might benefit from the analysis in this paper. [source] Long-lasting hippocampal potentiation and contextual memory consolidationEUROPEAN JOURNAL OF NEUROSCIENCE, Issue 12 2001Benedetto Sacchetti Abstract In order to ascertain whether there are hippocampal electrophysiological modifications specifically related to memory, exploratory activity and emotional stress, extracellular electrical activity was recorded in hippocampal slices prepared from the brains of male adult rats. Several groups of animals were employed: (i) rats which had freely explored the experimental apparatus (8 min exposure); (ii) rats which had been subjected, in the same apparatus, to a fear conditioning paradigm training entailing the administration of aversive electrical footshocks (8 min exposure); (iii) rats to which the same number of aversive shocks had been administered in the same apparatus, but temporally compressed so as to make difficult the association between painful stimuli and the apparatus (30 s exposure); (iv) naïve rats never placed in the apparatus. Half of the rats from each treatment group were used for retrieval testing and the other half for hippocampal excitability testing. The conditioned freezing response was exhibited for no less than 4 weeks. Hippocampal excitability was measured by means of input,output curves (IOC) and paired-pulse facilitation curves (PPF). Retrieval testing or brain slices preparation were performed at increasing delays after the training sessions: immediately afterwards or after 1, 7 or 28 days. Only the rats subjected to the fear conditioning training exhibited freezing when placed again in the apparatus (retrieval testing). It was found that IOCs, with respect to naïve rats, increased in the conditioned animals up to the 7-day delay. In free exploration animals the IOCs increased only immediately after the training session. In all other rats no modification of the curves was observed. IOC increases do not appear to imply presynaptic transmitter release modifications, because they were not accompanied by PPF modifications. In conclusion, a clear-cut correlation was found between the increase in excitability of the Schaffer collateral,CA1 dendrite synapses and freezing response consolidation. [source] Enhancing Security Value by Ownership Restrictions: Evidence from a Natural ExperimentFINANCIAL MANAGEMENT, Issue 4 2005Amar Gande We present new evidence from a natural experiment to show circumstances in which ownership restrictions can enhance value. Our evidence is based on multiple restricted bond issues by an emerging market issuer at 150 basis points lower than comparable bonds, resulting in a billion dollars saving. This is intriguing: how can an emerging market issuer with junk bond ratings obtain such low yields? We argue ownership restrictions enhance value since they enable an issuer to precommit to renegotiate efficiently with a favored clientele in the potential default states, thereby circumventing deadweight costs of prolonged negotiations, particularly when the restricted clientele also values the underlying collateral higher than other investors. Ownership restrictions can also result in a transfer of value from holders of unrestricted bonds to holders of restricted bonds because of implicit seniority of the latter. We empirically test and find support for both value enhancement and value transfer and show robustness to several alternative explanations. Our evidence suggests that firms can benefit from designing securities with ownership restrictions, by offering new securities exclusively to investors who value them the most. [source] Concepts in Social and Spatial MarginalityGEOGRAFISKA ANNALER SERIES B: HUMAN GEOGRAPHY, Issue 2 2000Assefa Mehretu The purpose of this paper is to present a conceptual taxonomy of marginality resulting from two counterposed structural conditions within laissez-faire on the one hand and controlled markets on the other. Marginality is a complex condition of disadvantage that individuals and communities may experience because of vulnerabilities which may arise from unequal or inequitable environmental, ethnic, cultural, social, political and economic factors. A typology of marginality is based on two primary and two derivative forms. The primary forms are contingent and systemic. The derivative forms are collateral and lever-aged. Contingent marginality is a condition that results from competitive inequality in which individuals and communities are put at a disadvantage because of the dynamics of the free market whose uncertain and stochastic outcomes affect them adversely. Systemic marginality is a socioeconomic condition of disadvantage created by socially constructed inequitable non-market forces of bias. Collateral marginality is a condition experienced by individuals or communities who are marginalized solely on the basis of their social and/or geographic proximity to individuals or communities that experience either contingent or systemic marginality. Lever-aged marginality is a contingent or systemic disadvantage that people/communities are made to experience when their bargaining position in free markets is weakened by dominant stakeholders like transnational corporations which are able to leverage lucrative concessions by using the threat of alternative, often cheaper and marginalized (contingent or systemic) labour pools to which they can potentially take their business. [source] Spatiotemporal analysis of NO production upon NMDA and tetanic stimulation of the hippocampusHIPPOCAMPUS, Issue 4 2005Norio Takata Abstract Nitric oxide (NO) is a gaseous neuromessenger. Although increasing evidence reveals significant physiological effects of NO in the hippocampal synaptic plasticity, the spatial distribution of NO production has remained largely uncharacterized due to the poor development of techniques for real-time NO imaging. In this work, using a NO-reactive fluorescent dye, diaminorhodamine-4M (DAR-4M), time-dependent heterogeneous NO production is demonstrated in hippocampal slices upon N-methyl- D -aspartate (NMDA) stimulation or tetanic stimulation. NMDA-induced DAR fluorescence increase in the CA1 was found to be twice that in the CA3 and the dentate gyrus (DG). Intracellular Ca2+ concentration was also investigated. NMDA induced similar Ca2+ responses both in the CA1 and DG, which were approx. 13% greater than that in the CA3. Subsequently, spatial distribution of NO production in the CA1 upon a tetanic stimulation of Schaffer collateral was investigated, because there are contradictory reports on the effect of NO on long-term potentiation (LTP), and that NO is known to exert various physiological effects depending on its concentration. In the stratum radiatum (sr), DAR fluorescence increase upon tetanus was largest at the vicinity of a stimulating electrode and decreased as a function of increasing distance from the stimulating electrode, suggesting the possibility that the effect of NO in LTP is dependent on the distance between stimulating and recording electrodes. The tetanus-induced Ca2+ response observed in the sr showed the same but weak distant dependence from the stimulating electrode. Taken together, the observed heterogeneity in the distribution of NO production is suggestive of region-specific effects of NO in the hippocampus. © 2005 Wiley-Liss, Inc. [source] Land tax and economic growth under credit market imperfectionINTERNATIONAL JOURNAL OF ECONOMIC THEORY, Issue 2 2007Masaya Sakuragawa H20; O40 We study the general equilibrium effects of land taxation on economic growth by extending the model developed by Kiyotaki and Moore (1997) to an endogenous growth model, where land is used not only as an input of production but also as collateral. Land taxation tends to hamper economic growth through the credit-contraction effect, but the overall direction on economic growth depends on the redistribution scheme of the tax revenue. Surprisingly, we show that if the tax revenue is fully refunded to entrepreneurs, the economy grows faster than a no-taxation economy. We calibrate our model and show that if taxation on land is raised by 1 percent, the land price initially falls by approximately 9.09 percent, while the economy grows faster by 0.6%. [source] Private or public: debating the meaning of tenure legalizationINTERNATIONAL JOURNAL OF URBAN AND REGIONAL RESEARCH, Issue 3 2002Ann Varley Hernando de Soto's book The mystery of capital has renewed debate about illegality in low,income housing in Latin America, Asia and Africa. De Soto and others argue that property titles provide the poor with collateral for loans to improve their housing or set up a business. Critics argue that incorporation into the formal market will displace the original inhabitants. In this article I analyse these debates about legalization as expressions of the dualisms that have shaped western thought. The relation between legal and illegal can be understood as a variant of the public/private dichotomy. Challenging the opposition of legal to illegal, I argue that the difference between them is not as great as the proponents of legalization assume. This questions the efficacy of legalization as an engine of change. In Mexico, the beneficiaries of legalization have little interest in formal credit, preferring loans from friends or relatives, and legalization does not lead to displacement. The failure of theories about legalization to predict the outcome is a product of their reliance on dualistic thinking and of the exclusion of the private from their accounts of the process. Le livre d'Hernando de Soto, The mystery of capital, a relancé le débat sur l'illégalité de l'habitat à faible revenu en Amérique latine, Asie et Afrique. Selon de Soto et d'autres, les titres de propriété procurent aux pauvres une garantie pour emprunter afin d'améliorer leur logement ou de créer une entreprise. Les opposants affirment qu'une intégration au marché officiel déplacerait les habitants d'origine. L'article analyse ces débats sur la légalisation en tant qu'expressions des dualismes qui ont façonné la pensée occidentale. On peut appréhender la relation entre le légal et l'illégal comme une variante de la dichotomie public,privé. En contestant l'opposition légal,illégal, on peut affirmer que la différence n'est pas aussi importante que le supposent les partisans de la légalisation, ce qui remet en cause l'efficacité de celle,ci en tant que moteur de changement. Au Mexique, les bénéficiaires de la légalisation s'intéressent peu au crédit officiel, préférant les prêts entre amis ou parents, et cette légalisation ne provoque pas de déplacement. Les théories sur la légalisation ont échoué dans leur prédiction des résultats, car elles s'appuient sur une réflexion dualiste et excluent le privé de leur évaluation du processus. [source] Maternal and fetal microvasculature in sheep placenta at several stages of gestationJOURNAL OF ANATOMY, Issue 3 2010Shireen A. Hafez Abstract Maternal and fetal microvasculature was studied in ewes at days 50, 90 and 130 of gestation using microvascular corrosion casting and scanning electron microscopy. Microvascular corrosion casts of caruncles at day 50 were cup-shaped with a centrally located cavity. Branches of radial arteries entered the caruncle from its base and ramified on the maternal surface of the caruncle. Stem arteries broke into an extensive mesh of capillaries forming crypts on the fetal surface. The architecture of the caruncle at day 90 was similar to what was found at day 50 but the vascularity and the depth of the crypts increased in correspondence to increased branching of fetal villi. The substance of the caruncle was thicker at day 130 compared with day 50, with no remarkable difference compared with day 90. Capillary sinusoids of irregular form and diameter were observed on the fetal surface of the caruncle at all stages. These sinusoids may reduce blood flow resistance and subsequently increase transplacental exchange capacity. A microvascular corrosion cast of the cotyledon was cup-shaped with wide and narrow sides. Cotyledonary vessels entered and left the cotyledon from the narrow side. A cotyledonary artery gave proximal collateral branches immediately after entering the cotyledon and then further branched to supply the remaining portion of the cotyledon. Vessel branches broke into a mesh of capillaries forming the fetal vascular villi. Fetal villi that were nearest to the center of the cotyledon were the longest. Capillaries forming villi were in the form of a web-like mesh, were irregular in size and had sinusoidal dilations. The architecture of the cotyledon at day 90 was similar to day 50, but the vascularity increased. Branching of the fetal villi became more abundant. This extensive branching presumably allows a higher degree of invasion and surface contact to maternal tissues. At day 130, the distal portions of the fetal villi showed low ridges and troughs to increase the surface area for diffusion. Branching of fetal villi appears to influence the elaboration of maternal crypts in all stages of gestation. However, correspondence between crypts and villi is restricted to distal portions of fetal villi. [source] On the Use of CollateralJOURNAL OF ECONOMIC SURVEYS, Issue 2 2000Giuseppe Coco This paper surveys existing explanations for the pervasive use of collateral in credit markets and relates them to the empirical evidence on the subject. Collateral may be used as a screening or an incentive device in markets characterized by various forms of asymmetric and biased information. The evidence is incompatible with the use of collateral as a signal of projects' quality, while broadly consistent with explanations based on its incentive properties and asymmetric evaluation of projects. [source] Anastomosis between the hepatic artery and the extrahepatic collateral or between extrahepatic collaterals: Observation on angiographyJOURNAL OF MEDICAL IMAGING AND RADIATION ONCOLOGY, Issue 3 2009S Miyayama Summary Transcatheter arterial chemoembolisation for hepatocellular carcinoma is widely carried out not only through the hepatic artery but also through the extrahepatic collateral pathways. Anatomically, there are many anastomoses between the hepatic artery and the extrahepatic collateral as well as among the extrahepatic collaterals. However, these anastomoses may not be shown on angiography because the anastomosing braches are too small. These anastomoses may not only interfere with effective control of hepatocellular carcinoma by transcatheter arterial chemoembolisation but also cause unexpected procedure-related complications. Therefore, radiologists should have sufficient knowledge of these underlying anastomoses. In this report, we present our angiographic images. [source] Anomalous unilateral single pulmonary vein: Two cases mimicking arteriovenous malformations and a review of the literatureJOURNAL OF MEDICAL IMAGING AND RADIATION ONCOLOGY, Issue 3 2005JM Hanson Summary Total anomalous pulmonary venous drainage is a rare congenital anomaly. It usually involves a pulmonary to systemic venous shunt and most cases have a septal defect in order to survive. Anomalous pulmonary venous drainage with pulmonary venous shunting is an extremely rare and entirely benign entity. We present two such cases, in which there was atresia of the left superior pulmonary vein and drainage via a tortuous collateral vein to the left inferior pulmonary vein. This collateral was mistaken on plain film and CT for a pulmonary arteriovenous malformation. Awareness of this anomalous unilateral single pulmonary vein and its radiological appearances may help in avoiding unnecessary pulmonary angiography. [source] Forbearance and Prompt Corrective ActionJOURNAL OF MONEY, CREDIT AND BANKING, Issue 5 2007NARAYANA R. KOCHERLAKOTA risky collateral; limited enforcement; banking regulation; optimal social contract This article investigates whether a bank regulator should terminate problem banks promptly or exercise forbearance. We construct a dynamic model economy in which entrepreneurs pledge collateral, borrow from banks, and invest in long-term projects. We assume that collateral value has aggregate risk over time, that in any period entrepreneurs can abscond with the projects but lose the collateral, and that depositors can withdraw deposits. We show that optimal regulation exhibits forbearance if the ex-ante probability of collapse in collateral value is sufficiently low, but exhibits prompt termination of problem banks if this probability is sufficiently high. [source] Collateral Reports in the College Setting: A Meta-Analytic IntegrationALCOHOLISM, Issue 5 2009Brian Borsari Background:, The majority of research examining college drinking utilizes self-report data, and collateral reports have been used to verify participants' self-reported alcohol use. Methods:, This meta-analytic integration examined the correspondence of over 970 collateral and participant dyads in the college setting. Results and Conclusions:, Results indicated that there is little bias (mean difference) between collateral estimates of participant drinking and participant's self-report. A cumulative meta-analysis revealed that this (null) effect was stable and unlikely to be altered by subsequent research or the existence of unpublished studies. Analysis of the agreement between collaterals and participant estimates (measured by intraclass correlation coefficients; ICCs) revealed moderate levels of agreement (mean ICC = 0.501). Examination of predictors of both bias and agreement in collateral and participant reports indicates a possible intentional and protective underreporting on the part of the collaterals. Ways to reduce this bias are discussed along with the value of using collaterals to verify participant self-report in the college setting. [source] Changes in a rat facial muscle after facial nerve injury and repairMUSCLE AND NERVE, Issue 9 2001Davor Jergovi Abstract This study describes changes in a rat facial muscle innervated by the mandibular and buccal facial nerve branches 4 months after nerve injury and repair. The following groups were studied: (A) normal controls; (B) spontaneous reinnervation by collateral or terminal sprouting; (C) reinnervation after surgical repair of the mandibular branch; and (D) chronic denervation. The normal muscle contained 1200 exclusively fast fibers, mainly myosin heavy chain (MyHC) IIB fibers. In group B, fiber number and fiber type proportions were normal. In group C, fiber number was subnormal. Diameters and proportions of MyHC IIA and hybrid fibers were above normal. The proportion of MyHC IIB fibers was subnormal. Immediate and delayed repair gave similar results with respect to the parameters examined. Group D rats underwent severe atrophic and degenerative changes. Hybrid fibers prevailed. These data suggest that spontaneous regeneration of the rat facial nerve is superior to regeneration after surgical repair and that immediacy does not give better results than moderate delay with respect to surgical repair. Long delays are shown to be detrimental. © 2001 John Wiley & Sons, Inc. Muscle Nerve 24: 1202,1212, 2001 [source] 3.,Money, Credit, and CrisisAMERICAN JOURNAL OF ECONOMICS AND SOCIOLOGY, Issue 4 2009Mason Gaffney The financial crisis of 2008,2009 has antecedents in earlier crises, including the Great Depression. In order to understand how the current crisis arose, we must review the most fundamental principles of banking. Doing that, we find that the main service performed by banks is the creation of liquidity, a collective good that can be destroyed by the behavior of individual financial institutions. The key element in creating liquidity is the monetization of various types of collateral. When collateral takes the form of land or capital that turns over slowly, banks lose liquidity. That is why major banking crises have frequently been associated with real estate lending. The best way to restore health to the financial system is by restoring the principles of the "real bills" doctrine that requires loans to be self-liquidating. [source] IS A GOVERNMENTAL MICRO-CREDIT PROGRAM FOR THE POOR REALLY PRO-POOR?THE DEVELOPING ECONOMIES, Issue 2 2008EVIDENCE FROM VIETNAM I32; I38; H43; H81 It is argued that without collateral the poor often face binding borrowing constraints in the formal credit market. This justifies a micro-credit program, which is operated by the Vietnam Bank for Social Policies to provide the poor with preferential credit. The present paper examines poverty targeting and the impact of the micro-credit program. It is found that the program is not very pro-poor in terms of targeting. The nonpoor account for a larger proportion of the participants. The nonpoor also tend to receive larger amounts of credit compared to the poor. However, the program has reduced the poverty rate of the participants. The positive impact is found for all three Foster-Greer-Thorbecke poverty measures. [source] Screening by the Company You Keep: Joint Liability Lending and the Peer Selection EffectTHE ECONOMIC JOURNAL, Issue 465 2000Maitreesh Ghatak We look at an economic environment where borrowers have some information about the nature of each other's projects that lenders do not. We show that joint-liability lending contracts, similar to those used by credit cooperatives and group-lending schemes, will induce endogenous peer selection in the formation of groups in a way that the instrument of joint liability can be used as a screening device to exploit this local information. This can improve welfare and repayment rates if standard screening instruments such as collateral are unavailable. [source] Peer Group Formation in an Adverse Selection ModelTHE ECONOMIC JOURNAL, Issue 465 2000Beatriz Armendariz De Aghion This paper develops an adverse selection model where peer group systems are shown to trigger lower interest rates and remove credit rationing in the case where borrowers are uninformed about their potential partners and ex post state verification (or auditing) by banks is costly. Peer group formation reduces interest rates due to a ,collateral effect', namely, cross subsidisation amongst borrowers acts as collateral behind a loan. By uncovering such a collateral effect, this paper shows that peer group systems can be viewed as an effective risk pooling mechanism, and thus enhance efficiency, not just in the full information set up. [source] Investment and Finance in de novo private firms: Empirical Results from the Czech Republic, Hungary and PolandTHE ECONOMICS OF TRANSITION, Issue 1 2000Andrzej Bratkowski In this paper we use a survey of 281 Czech, Hungarian and Polish newly-established small private firms in order to shed some light on the constraints these firms face in the credit market. The results of our survey show that imperfections in capital markets in Central European economies do not seem to actually inhibit the growth of new private firms. Credit markets do exist for de novo private firms in the three Central European transition economies studied, and they provide quite a large amount of financing from an early stage of the existence of firms. Financial intermediation works reasonably well as far as de novo private firms are concerned: loss-making de novo firms have a lower probability of getting credit than profitable ones. Banks protect themselves against the risk of a deteriorating pool of borrowers by requiring collateral for their loans. We do not find convincing evidence concerning the existence of adverse selection. Loss-making firms are not ready to pay higher interest rates than profitable firms and are not more likely to ask for credit than profitable firms. [source] LAND PRICE, COLLATERAL AND ECONOMIC GROWTH,THE JAPANESE ECONOMIC REVIEW, Issue 4 2009MASAYA SAKURAGAWA This paper extends Kiyotaki and Moore's (1997) to an endogenous growth model and investigates the dynamic properties of a growing economy with binding credit constraint when land is used not only as an input of production but also as collateral. There exists a balanced growth path in an economy with binding credit constraint. In response to a once and for all productivity shock, the developed model shows the propagation mechanism among output, capital, bank credit and the land price in terms of the growth rate. The model's tractability allows us to derive interesting qualitative and quantitative findings on business cycles. [source] The Impact of Collateralization on Swap RatesTHE JOURNAL OF FINANCE, Issue 1 2007MICHAEL JOHANNES ABSTRACT Interest rate swap pricing theory traditionally views swaps as a portfolio of forward contracts with net swap payments discounted at LIBOR rates. In practice, the use of marking-to-market and collateralization questions this view as they introduce intermediate cash flows and alter credit characteristics. We provide a swap valuation theory under marking-to-market and costly collateral and examine the theory's empirical implications. We find evidence consistent with costly collateral using two different approaches; the first uses single-factor models and Eurodollar futures prices, and the second uses a formal term structure model and Treasury/swap data. [source] | |||||||||||||||||||||||||||||||||||||