This paper examines the reporting of bank loans in the financial press during the 2004-2007 period. More specifically, it uses a unique hand-collected data set to examine the frequency and determinants of loan reporting. The motivation is double folded. First, virtually all publicly traded firms borrow from banks. However, despite their widespread use, the reporting of bank loan agreements in t...

We study borrowers’ optimal choice between formal and informal sources of credit in a setting with strategic default due to limited enforcement. Informal loans (e.g., from friends or relatives) can be enforced by the threat of severing social ties which hurts both the borrower and the lender, while formal loans (e.g., from banks) are enforced by requiring collateral. We show that in this settin...

This paper presents a unified model of the default and prepayment behavior of homeowners in a proportional hazard framework. The model uses the option-based approach to analyze default and prepayment, and considers these two interdependent hazards as competing risks. The results indicate the sensitivity of default to the initial loan-to-value ratio of the loan and the course of housing equity. ...

An encompassing model of a business loan contract with the bank is constructed to establish the roles and relative importance of asymmetry of information, market power, borrower (entrepreneurial) effort and quality in explaining contract features. Special cases of the model include symmetric versus asymmetric information regimes, competition versus monopoly power, adverse selection versus moral...

This article reviews recent developments in the US and UK in response to rising foreclosures, with an emphasis on the provision of advice or counseling to borrowers in mortgage default. Both nations have increased support for counseling programs despite the lack of evidence that counseling is effective. Based on a quantitative study in the US and a qualitative study in the UK, this article prov...

Microfinance loans have expanded greatly in the recent years as a way of helping the poor gain cheaper loans, but percentage take-up of microcredit has remained lower than expectations. In an attempt to explain this phenomenon, this paper uses a randomized evaluation of the impact of introducing microfinance loans in a new urban setting in Hyderabad, India, to determine if lack of flexibility i...

How do taxes in the financial sector affect economic outcomes? We analyze a simple general equilibrium model with financial intermediation. We formalize a trade-off between tax policies that burden the owners of banks and tax policies that burden households. We also study the implications of the financial sector’s exemption from value added taxation (VAT). Main results are that an increased tax...

Real estate is one of the fastest growing sector nowadays in our country. With increasing population, demand and foreign investments and flexibly in rules and regulations by various organizations e.g. housing bank loans schemes etc. have further added to its growth rate. Today most of the cities are facing non–uniform growth. If one wants to invest in real estate then, where to invest? , how mu...