In credit markets, screening algorithms discriminate between good-type and bad-type borrowers. This is their raison d’etre. However, by doing so, they also often individuals sharing a protected attribute (e.g. gender, age, race) the rest of population. this paper, we show how to test (1) whether there exists statistical significant difference in terms rejection rates or interest rates, called l...

Abstract Adverse market events can affect credit supply not only by hurting financial fundamentals but also changing the risk-taking behaviors of individual decision-makers. We provide micro-level evidence this decision-making channel in U.S. mortgage market. find that application rejection rates are more sensitive to foreclosure intensity when loan officers exposed news, despite same housing a...

The paper develops a positive theory of dynamic competition between credit card lenders, featuring balance transfers and default. Based on our theory and our quantitative results, we argue that the observed outcomes in the US credit card market are consistent with reduced effectiveness of personal bankruptcy protection, and inefficiently elevated costs of unsecured credit for intertemporal smoo...

Lending remains one of the major functions of banks in all economies. In fact, interest charged on loans and advances today constitute a sizeable part of banks’ earnings. However, the possibility of failure of loans creates nightmares for not only the borrower and lender, but also poses a serious setback to the economy. This paper identifies non-performing credit as a major threat to the profit...

The Russian Default of 1998 provides a natural experiment to test how global …nancial linkages transmit negative credit supply shocks to emerging markets. Using bank-level data from Peru, I show that the shock a¤ects bank lending by both foreign and domestic banks because all banks re…nance their lending abroad. Using microdata on all corporate loans, I show that foreign banks reduce lending le...

We study the transmission of (unconventional) monetary policy to real sector when firm decisions depend on both current and future credit market conditions. For a given level access, investment employment increase more for firms expecting bank improve in future. Three separate unconventional policies by ECB – OMT, introduction negative rates, CSPP improved expectations access SMEs borrowing fro...

In several jurisdictions, rules on interest rate ceilings usually treated under the concept of “usury laws” are an important part of the regulation of consumer credit, not without a constant controversy about the real bene ts to debtors, especially those with fewer resources. At rst glance, the Chilean regime of interest rate ceilings seems to be particularly robust since it considers four di e...

This study presents evidence on the relative accommodation of credit requests made by minority start-up entrepreneurs in U.S. farm sector. Loan packaging terms (amount, interest rate, and maturity) prescribed lending officers Farm Service Agency, government's arm to sector, are analyzed compared across racial/ethnic gender groups borrowers. The intention is discern whether loan favorable suppor...