Download or read book The Role of Guarantees in Bank Lending written by Alberto Franco Pozzolo and published by . This book was released on 2004 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Credit Guarantees written by Michael Gudger and published by Food & Agriculture Org.. This book was released on 1998 with total page 154 pages. Available in PDF, EPUB and Kindle. Book excerpt: The problem of collateral is a daily issue for lenders and causes much debate in the development finance community. Given the difficulties experienced in arranging traditional forms of loan security, such as land or chattel mortgages, various collateral substitutes have been proposed. Among the substitutes for traditional collateral is the loan guarantee. Guarantee systems for loans have been proposed, planned and implemented in various countries. The assumption made by proponents of such a service is that the guarantee organization is either better informed about the risk of the loan than the lender or it is better structured financially to be able to manage the risk. Despite the apparent attractiveness of a loan guarantee, the empirical evidence available gives little encouragement. Nevertheless, interest in guarantees continues.
Download or read book Bank Lending in the Knowledge Economy written by Mr.Giovanni Dell'Ariccia and published by International Monetary Fund. This book was released on 2017-11-07 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study bank portfolio allocations during the transition of the real sector to a knowledge economy in which firms use less tangible capital and invest more in intangible assets. We show that, as firms shift toward intangible assets that have lower collateral values, banks reallocate their portfolios away from commercial loans toward other assets, primarily residential real estate loans and liquid assets. This effect is more pronounced for large and less well capitalized banks and is robust to controlling for real estate loan demand. Our results suggest that increased firm investment in intangible assets can explain up to 20% of bank portfolio reallocation from commercial to residential lending over the last four decades.
Download or read book Loan Guarantees Bank Lending and Credit Risk Reallocation written by Carlo Altavilla and published by . This book was released on 2021 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate whether government credit guarantee schemes, extensively used at the onset of the Covid-19 pandemic, led to substitution of non-guaranteed with guaranteed credit rather than fully adding to the supply of lending. We study this issue using a unique euro-area credit register data, matched with supervisory bank data, and establish two main findings. First, guaranteed loans were mostly extended to small but comparatively creditworthy firms in sectors severely affected by the pandemic, borrowing from large, liquid and well-capitalized banks. Second, guaranteed loans partially substitute pre-existing non-guaranteed debt. For firms borrowing from multiple banks, the substitution mainly arises from the lending behavior of the bank extending guaranteed loans. Substitution was highest for funding granted to riskier and smaller firms in sectors more affected by the pandemic, and borrowing from larger and stronger banks. Overall, the evidence indicates that government guarantees contributed to the continued extension of credit to relatively creditworthy firms hit by the pandemic, but also benefited banks' balance sheets to some extent.
Download or read book Credit Guarantees written by Asian Development Bank and published by Asian Development Bank. This book was released on 2016-10-01 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Pacific Private Sector Development Initiative---a regional technical assistance facility cofinanced by the Asian Development Bank (ADB), the Government of Australia, and the Government of New Zealand---has undertaken landmark secured transaction reforms in eight Pacific Island countries. These reforms have unlocked the value in "movable" assets such as machinery, inventory, and accounts receivable for use as collateral in borrowing. They have the potential to benefit businesses and financial institutions that offer business loans. Yet, despite these reforms, financial institutions remain unwilling to lend. Businesses still find it hard to access the credit they need to grow, which in turn creates jobs and drives the economic activity so desperately needed in the Pacific. Credit guarantees are often proposed as an instrument to overcome this problem. However, as this publication demonstrates, there is no strong theoretical justification for their use.
Download or read book Loan Guarantees written by United States. Congressional Budget Office and published by . This book was released on 1978 with total page 78 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Credit Guarantee Schemes for Small and Medium Enterprises written by Jacob Levitsky and published by . This book was released on 1987-01-01 with total page 91 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Effects of Bank Capital on Lending written by Joseph M. Berrospide and published by DIANE Publishing. This book was released on 2011-04 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: The effect of bank capital on lending is a critical determinant of the linkage between financial conditions and real activity, and has received especial attention in the recent financial crisis. The authors use panel-regression techniques to study the lending of large bank holding companies (BHCs) and find small effects of capital on lending. They then consider the effect of capital ratios on lending using a variant of Lown and Morgan's VAR model, and again find modest effects of bank capital ratio changes on lending. The authors¿ estimated models are then used to understand recent developments in bank lending and, in particular, to consider the role of TARP-related capital injections in affecting these developments. Illus. A print on demand pub.
Download or read book Usability of Bank Capital Buffers The Role of Market Expectations written by José Abad and published by International Monetary Fund. This book was released on 2022-01-28 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: Following the COVID shock, supervisors encouraged banks to use capital buffers to support the recovery. However, banks have been reluctant to do so. Provided the market expects a bank to rebuild its buffers, any draw-down will open up a capital shortfall that will weigh on its share price. Therefore, a bank will only decide to use its buffers if the value creation from a larger loan book offsets the costs associated with a capital shortfall. Using market expectations, we calibrate a framework for assessing the usability of buffers. Our results suggest that the cases in which the use of buffers make economic sense are rare in practice.
Download or read book Public Guarantees Relationship Lending and Bank Credit written by Gabriel Jiménez and published by . This book was released on 2022 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the impact of public credit guarantee schemes on the allocation and performance of bank credit during the COVID-19 crisis. We exploit exhaustive loan-level data from the credit register with unique information on the provision of COVID-19 public loan guarantees in Spain. We find that firms are more likely to obtain a public guaranteed loan from banks to which they have larger pre-COVID credit exposures, measured as the share of the firm's total credit outstanding with the bank before the shock. This effect is more pronounced for risky firms and for firms in more pandemic-affected sectors, especially for weaker ex-ante banks, with lower capital and higher nonperforming loans. Effects operate both at the intensive and extensive margin of lending. Moreover, we show that the guarantee scheme results in credit substitution at the firm-bank level, with the share and amount of nonguaranteed (private) credit declining for firms that obtain guaranteed loans, in part reflecting early prepayment of outstanding private credit. Further, banks that grant guaranteed loans are less prone to recognize loan impairment, consistent with the public guarantee acting as a protection against (private) credit risk. Finally, we find that banks that participate more in the public credit guarantee scheme gain market share by increasing their portfolio of loans to existing but also to (less risky) new borrowers. These results show that government guaranteed credit has relevant economic effects on the structure of the banking system by affecting both existing and new borrower-lender relationships.
Download or read book Finance Development March 2012 written by International Monetary Fund. External Relations Dept. and published by International Monetary Fund. This book was released on 2012-03-14 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: Young people, hardest hit by the global economic downturn, are speaking out and demanding change. F&D looks at the need to urgently address the challenges facing youth and create opportunities for them. Harvard professor David Bloom lays out the scope of the problem and emphasizes the importance of listening to young people in "Youth in the Balance." "Making the Grade" looks at how to teach today's young people what they need to get jobs. IMF Deputy Managing Director, Nemat Shafik shares her take on the social and economic consequences of youth unemployment in our "Straight Talk" column. "Scarred Generation" looks at the effects the global economic crisis had on young workers in advanced economies, and we hear directly from young people across the globe in "Voices of Youth." Renminbi's rise, financial system regulation, and boosting GDP by empowering women. Also in the magazine, we examine the rise of the Chinese currency, look at the role of the credit rating agencies, discuss how to boost the empowerment of women, and present our primer on macroprudential regulation, seen as increasingly important to financial stability. People in economics - C. Fred Bergsten, American Globalist. Back to basics - The multi-dimensional role of banks in our financial systems.
Download or read book Borrowing Costs and The Role of Multilateral Development Banks Evidence from Cross Border Syndicated Bank Lending written by Daniel Gurara and published by International Monetary Fund. This book was released on 2018-12-07 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: Cross-border bank lending is a growing source of external finance in developing countries and could play a key role for infrastructure financing. This paper looks at the role of multilateral development banks (MDBs) on the terms of syndicated loan deals, focusing on loan pricing. The results show that MDBs' participation is associated with higher borrowing costs and longer maturities---signaling a greater willingness to finance high risk projects which may not be financed by the private sector---but it is also associated with lower spreads for riskier borrowers. Overall, our findings suggest that MDBs could crowd in private investment in developing countries through risk mitigation.
Download or read book Government Guarantees written by Timothy Irwin and published by World Bank Publications. This book was released on 2007 with total page 230 pages. Available in PDF, EPUB and Kindle. Book excerpt: The book considers when governments should give guarantees to private investors. After describing the history of guarantees, and the challenges the politics and psychology create for good decisions, the book sets out a principles for allocating risk (and therefore guarantees), techniques for valuing guarantees, and rules to encourage good decisions.
Download or read book Analysis of the Terms of Bank Lending and Risk Management written by Raymond L. Posey (Jr.) and published by . This book was released on 2010 with total page 168 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is a three-part dissertation, which provides a multi-faceted examination of loans and lending to small businesses in the US, which are a key source of economic and job growth. From a broad perspective, this work shows the interplay among various terms of lending, marked differences in lender behavior based on size and type, and a significant role of multiple loans/lenders in explaining loan delinquencies. Essay 1 examines the role of loan guarantees in lines of credit grated to small businesses. The presence of a loan guarantee is associated with lower interest rates and smaller lines of credit. There is some evidence that loan guarantees and collateral are substitutes. Firms with longer banking relationships and fewer banking relationships are less likely to have loan guarantees applied. Since there is some evidence of simultaneity in the data, appropriate econometric procedures are used to obtain consistent parameter estimates. Essay 2 examines differences in terms of lending among two sizes of banks and farm lenders for small loans. Large farm lenders do use more collateral than large bank lenders, but small banks use more collateral than small farm lenders. There is evidence that small banks use more collateral than large banks. All farm lenders appear to use similar levels of collateral, whereas small banks use more collateral than large banks. The determinants of collateral differ based on lender characteristics. For all sizes of farm lenders, the shorter the term of the loan, the more likely the use of non-real estate collateral, and vice versa. Essay 3 examines the determinants of farm loan delinquencies, and in particular, the influence of multiple loans and multiple lenders on delinquency. The number of lenders used by a borrower, the number of loans, and the product of the two are all positively related to loan delinquency. These factors are at least as significant as standard financial ratios in explaining loan delinquency. The most consistent finding regarding farm borrower delinquency is that borrowers who have been denied credit in the past five years are more likely to have a delinquent loan. It is also found that borrowers using more lenders appear to be able to bargain for lower interest rates.
Download or read book Loan Guarantees for Large Infrastructure Projects written by Stephany Griffith-Jones and published by . This book was released on 1993 with total page 108 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recoge: 1.The need for guarantees - 2.The issue of risk - 3.Experiences of loan guarantees.
Download or read book The Role of Guarantees in Bak Lending written by Alberto F. Pozzolo and published by . This book was released on 2004 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Loan Guarantees Bank Underwriting Policies and Financial Fragility written by Elena Carletti and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Loan guarantees represent a form of government intervention to support bank lending. However, their use raises concerns as to their effect on bank risk-taking incentives. In a model of financial fragility that incorporates bank capital and a bank incentive problem, we show that loan guarantees reduce depositor runs and improve bank underwriting standards, except for the most poorly capitalized banks. We highlight a novel feedback effect between banks' underwriting choices and depositors' run decisions, and show that the effect of loan guarantees on banks' incentives is different from that of other types of guarantees, such as deposit insurance.
