The Allocation of Credit and Financial Collapse*
ثبت نشده
چکیده
This paper examines the allocation of credit in a market in which borrowers have greater information concerning their own riskiness than do lenders. It illustrates that (1)the allocation of credit is inefficient and at times can be improved by government intervention, and (2) small changes in the exogenous risk-free interest rate can cause large (discontinuous) changes in the allocation of credit and the efficiency of the market equilibrium. These conclusions suggests a role for government as the lender of last resort.
منابع مشابه
The Development of Entrepreneurship and its Impact upon Provision of Group and Individual Credit Regarding Agricultural Sector of Zanjan
Accessibility of rural settlers to financial credit facilities is being considered as one of the important factor for development of entrepreneurship in ruralareas. As such, provision of micro credits could be a secured way for absorption of financial capital needed for development of entrepreneurship in rural areas. The allocation of this credit into agricultural sector could facilitate this p...
متن کاملInvestigating the Effect of Selected Sustainable Development Indicators on Credit Allocation: the Case of National Development Fund of Iran
Credit allocation through the usage of Portfolio optimization mainly seeks tomaximize return and minimize the risk of the portfolio; but there are other importantissues including sustainable development which is important for government/publicsectors. This paper presents a novel credit allocation approach based on portfoliooptimization and investigates the effects of selected indicators of sust...
متن کاملDesigning an Expert System for Credit Rating of Real Customers of Banks Using Fuzzy Neural Networks
Currently, in Iran's banking system, non-repayment of facilities has become one of the biggest issues, and due to the lack of a proper system for proper allocation of facilities, they face a number of problems, including the problem of allocation of loans, the problem of failure to repay loans Of the central bank, or the amount of facilities increased from the amount of reimbursement. The solut...
متن کاملGovernment Banking and Economic Growth in Iran
One of the measures taken by the 1979 Revolutionary Government of Iran was to denounce the mixed public-private ownership of the banking system of the pre-revolutionary era and implement a full scale banking nationalization and merging scheme. Since then the banking system has been operating under close supervision and scrutiny of the government - exercising its power to impose a variety of res...
متن کاملTransformation of Household Credit Behavior in the Conditions of Digitalization of the Financial Services Market
Within the article, the impact of modern digitalization processes on changing household credit behavior is considered. Much attention is paid to defining the essence of digitalization and exploring the features of its impact on the financial services market. Accordingly, the content of household credit behavior and its individual models are examined. This behavior is proposed to be considered a...
متن کامل