Collateral and asymmetric information in lending markets

We study the benefits and costs of collateral requirements in bank lending markets with asymmetric information. estimate a structural model firms’ credit demand for secured unsecured loans, banks’ contract offering pricing, firm default using registry data setting where information problems are pervasive. provide evidence that mitigates adverse selection moral hazard. With counterfactual experiments, we quantify how an shock to values propagates supply, allocation, interest rates, default, profits, document relative importance pricing rationing response this shock.