Innovation in banking and excessive loan growth

Innovation in banking and excessive loan growth / prepared by Daniel C. Hardy and Alexander F. Tieman.

The volume of credit extended by a bank can be an informative signal of its abilities in loan selection and management. It is shown that, under asymmetric information, banks may therefore rationally lend more than they would otherwise in order to demonstrate their quality, thus negatively affecting...

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Bibliographic Details
Main Authors: Hardy, Daniel C. L. (Author), Tieman, Alexander F. (Author)
Corporate Author: International Monetary Fund. Monetary and Capital Markets Department
Format: eBook
Language:English
Published: Washington, D.C. : International Monetary Fund, Monetary and Capital Markets Dept., 2008.
©2008
Series:IMF working paper ; WP/08/188.
Subjects:
Bank loans > Econometric models.
Bank loans > Econometric models
Kreditgeschäft.
Asymmetrische Information.
Signalling.
Online Access:Click for online access
Table of Contents:
  • I. Introduction; Figures; 1. Change in the ratio of credit to GDP, 2003-2007; II. The Model; Tables; 1. Expected Payoffs in Different States; III. Model Analysis; A. Full Information; B. Equilibria with Partial Information and Two Bank Types; Pooling; Separating; A parameterized example; C. Separating Equilibrium with Partial Information and a Continuum of Bank Types; 2. The Value Function for Different Types: Separating Equilibrium; IV. Extensions; A. Investment in Loan Technology; 3. Credit Volumes and Bank Characteristics for a Continuum of Types
  • 2. Investment Decision Starting From and Ending at Pooling EquilibriaB. Pervasive Moral Hazard and Low-Credit Outcomes; 3. Investment Decision Starting From and Ending at Separating Equilibria; 4. Separating Equilibrium with Low Credit Volume; V. Summary and Conclusions; 5. Pooling Equilibrium with Low Credit Volume; References; Appendix; I: Expected Loan Losses in a Pooling Equilibrium; II: Regularity Conditions on the Objective Function with a Continuum of Bank Types

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