Imperfect Competition and Costly Screening in the Credit Market under Conditions of Asymmetric Information

This article provides an analysis of how banks determine levels of information production when they are in imperfect competition and there is a condition of information asymmetry between borrowers and banks. Specifically, the study concentrates on information production activities of banks in duopoly where they simultaneously determine intensity of pre-loan screening as well as interest rates. The preliminary model of this paper illustrates that due to strategic complementarities between banks, banking competition can result in inferior equilibrium out of multiple equilibria and insufficient information production. Policymakers must take into account the possible adverse effects of competition-enhancing policies on information production activities.

Reality bites: Documentary photography and architectural realism = Fragmentos de realidad: Fotografía documental y realismo en arquitectura

En el día de hoy nos enfrentamos a una serie de desafíos económicos, geopolíticos y ambientales que apuntan hacia una transformación profunda del mundo tal y como lo conocemos. La arquitectura esta – siempre lo ha estado – imbricada en todos estos problemas. En nuestra actual condición de recursos limitados e injusticia global surge la necesidad de superar la dicotomía entre progreso y tradición, entre innovación y preservación – la urgencia de redefinir incluso cada uno de estos términos. Los tipos de crisis que encaramos ahora no se resolverán con mas tecnología y más crecimiento – se necesita también una profunda reevaluación de nuestros sistemas de valores e incluso de nuestra sensibilidad. En este contexto, la humilde contribución de esta tesis consiste en proponer la idea de un realismo en arquitectura, entendido como una actitud progresista y atenta a lo que ya existe, dispuesta a abrir los ojos al presente, a las condiciones y los problemas reales que nos rodean. Pensando en esta idea, resulta evidente que si bien el realismo carece de una definición clara en el campo de la arquitectura hoy, cuenta sin embargo con numerosos precedentes parciales, entre ellos algunos de los más notorios episodios de la historia de la arquitectura reciente. Al intentar confeccionar una lista provisional de arquitectos realistas en el último siglo, otro hecho se nos presenta: muchos, por no decir todos estos arquitectos, comparten una fijación por la fotografía, bien apropiándose del trabajo de fotógrafos contemporáneos, bien tomando sus propias imágenes como una forma de mirar fuera de sus estudios e incorporar la realidad del medio construido a sus proyectos. Parece entonces lógico pensar que la arquitectura, como disciplina visual, ha acudido a otra disciplina visual en búsqueda de su propia respuesta al problema del realismo – dentro de este campo la fotografía reverbera con la arquitectura especialmente, ya que ambas son consideradas simultáneamente como practicas utilitarias y como parte de las bellas artes. Parece entonces lógico el organizar la investigación como una serie de casos, con la esperanza de que la acumulación de diversas instancias en las que la arquitectura ha acudido a la fotografía en su búsqueda de un realismo arrojara luz sobre las ideas más generales a debate. Por tanto, cada uno de los episodios en este texto se examina en sus propios términos, si bien una serie de interconexiones emergen a medida que el estudio procede con un suave orden cronológico. Hacia el final del texto cuestiones más grandes recobran protagonismo, a medida que las repercusiones políticas de nuestro estudio se hacen más patentes y comenzamos a interrogar las implicaciones contemporáneas y el potencial futuro de nuestra discusión sobre el realismo. ABSTRACT Today we are faced with a series of economic, geopolitical and environmental challenges that outline a deep transformation of the world as we know it. Architecture is – it has always been – ingrained in all of these problems. In our current condition of limited resources and global inequalities there is a necessity to overcome the dichotomy between progress and tradition, between innovation and preservation – an urgency to even redefine these terms altogether. The types of crises that we are facing will not be solved with more technology and more growth – a deep reevaluation of our systems of values and our sensibilities are also needed. In this context, the humble contribution of this text is to put forward the idea of an architectural realism, understood as an attitude that is both progressive and attentive to what is already in place, willing to open its eyes to the present and accept the real conditions and problems around us. In thinking about this prospect, it immediately becomes apparent that even if realism lacks a clear definition in the field of architecture today, there are numerous partial precedents for it, among them some of the most notorious episodes in the recent history of architecture. In crafting a tentative list of realist architects in the last century, another realization takes place: many, not to say all of these architects, have had a fixation with photography, either appropriating the work of contemporary photographers or taking photographs themselves as a way to look out their windows and bring the reality of the built environment into their practices. It seems then logical to think that architecture, as a visual discipline, has looked to other visual disciplines in search for its own take on the problem of realism – within this field, photography specially resonates with architecture, since both are regarded simultaneously as utilitarian practices and belonging to the fine arts. The idea then becomes to organize the research as a series of cases, with the hope that the accumulation of diverse instances in which architecture has approached photography in its realist drive will shed some light on the larger ideas at stake. Therefore, each of the episodes in this text is examined on its own terms, with a series of interconnections slowly emerging as our survey proceeds with a soft chronologic order. Towards the end of the study, larger issues regain relevance as the political repercussions of our inquiry become more pressing and we start to question the contemporary implications and future potentials of our discussion on realism.

The assignment of credit through bills of exchange and transmission documents in Andalusi Law

The exchange traffic was a practice that suited the modus vivendi of caravanners and traders in the Islamic world. The inclusion of the Iberian.Peninsula into the most important commercial routes of Muslims – such as the silk route through the North Africa – provides a very solid reason to deepen in the study of the sources that have been preserved about the role that certain credit instruments, which represented an alternative to the coin, might have played in trade centres.

An act for granting to His Majesty the sum of fifty-five thousand pounds, and for striking the same in bills of credit, in the manner herein after directed..., 1764

Contains an act for collection of taxes to pay the debt by establishing a set fee of fifteen shillings per head and household.

Bank versus non-bank credit in the United States, Europe and China. Bruegel Policy Contribution, 2012/07, 5 June 2013

In the wake of recent crisis developments in the US and Europe, non-bank credit channels have often been portrayed as 'shadow banking' and have been considered primarily through the lens of the risks they may pose to financial stability. However, the debate about financial system structures remains immature, in large part due to lack of reliable and comparable data. The available evidence actually points towards a correlation between the development of non-bank credit and higher resilience against systemic risk, at least in developed economies. Policy should aim at better statistical information, and at strengthening the infrastructure for the gradual development of sustainable nonbank credit provision.

The distribution of debt across euro area countries : The role of individual characteristics, institutions and credit conditions. National Bank of Belgium Working Paper No. 252, December 2013

The aim of this paper is twofold. First, we present an up-to-date assessment of the differences across euro area countries in the distributions of various measures of debt conditional on household characteristics. We consider three different outcomes: the probability of holding debt, the amount of debt held and, in the case of secured debt, the interest rate paid on the main mortgage. Second, we examine the role of legal and economic institutions in accounting for these differences. We use data from the first wave of a new survey of household finances, the Household Finance and Consumption Survey, to achieve these aims. We find that the patterns of secured and unsecured debt outcomes vary markedly across countries. Among all the institutions considered, the length of asset repossession periods best accounts for the features of the distribution of secured debt. In countries with longer repossession periods, the fraction of people who borrow is smaller, the youngest group of households borrow lower amounts (conditional on borrowing), and the mortgage interest rates paid by low-income households are higher. Regulatory loan-to-value ratios, the taxation of mortgages and the prevalence of interest-only or fixed-rate mortgages deliver less robust results.

Collateral and Credit Rationing. The role of collateral in explaining and remediating the limited flow of credit to households and SMEs. ECRI Policy Brief No. 7, February 2014

European-wide data concerning both companies and households indicate that the credit rationing phenomenon, which has been predicted by theory, does in fact occur to a significant degree in the European credit market. Among SMEs, micro companies are most vulnerable and the current economic crisis has only made these concerns more pressing. Top-down use of the monetary transmission mechanism alone is insufficient to counter the problem. The other solution consists of a bottom-up, microeconomic stimulation of lending transactions, by focusing on collateral and guarantees. The data confirm the high importance that lenders – especially individual households and micro companies – attach to collateral and guarantees when making their lending decisions. As a consequence, we would argue that those parts of the law governing security interests and guarantees should be one of the primary targets for government policy aimed at improving credit flows, especially in avoiding a conflict between consumer protection measures and laws on surety and guarantees. This policy brief firstly aims to give an overview of the problem of credit rationing and to show that low-income households and SMEs are most concerned by the phenomenon. Focusing solely on loans as a way of financing and on the issues related to access to finance by micro and small companies as well households, it then sketches possible solutions focused on guarantees. This paper brings together data from the Eurosystem Household Finance and Consumption survey (HFCS), Eurostat, and both the latest wave of the extended biennial EC/ECB Survey on the access to finance of SMEs (EC/ECB SAFE 2013) and the latest wave of the smaller semi-annual ECB SAFE Survey, covering the period between October 2012 and March 2013.