A Simple Model of Credit Rationing with Information Externalities

Credit-rationing model similar to Stiglitz and Weiss [1981] is combined with the information externality model of Lang and Nakamura [1993] to examine the properties of mortgage markets characterized by both adverse selection and information externalities. In a credit-rationing model, additional information increases lenders ability to distinguish risks, which leads to increased supply of credit. According to Lang and Nakamura, larger supply of credit leads to additional market activities and therefore, greater information. The combination of these two propositions leads to a general equilibrium model. This paper describes properties of this general equilibrium model. The paper provides another sufficient condition in which credit rationing falls with information. In that, external information improves the accuracy of equity-risk assessments of properties, which reduces credit rationing. Contrary to intuition, this increased accuracy raises the mortgage interest rate. This allows clarifying the trade offs associated with reduced credit rationing and the quality of applicant pool.

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.

Letters of a business woman to her daughter, and, Letters of a business girl to her mother

by Zora Putnam Wilkins.

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.

Towards Better Use of Credit Reporting in Europe. CEPS-ECRI Task Force Report, September 2013

This report discusses how the current EU credit reporting systems meet the demands of the different stakeholders in the credit granting and management process, and what is needed to improve these systems. As credit reporting is a tool for responsible lending and for ensuring financial inclusion of consumers, it argues that the needs of EU credit markets and consumers should be the basis for assessing the current regulation and its functionality. How a creditor assesses the risk and the creditworthiness of a customer is at the core of successful and safe crediting. Facilitating this assessment process, within the boundaries of data protection laws, is a key building block for making well-informed credit decisions.

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.

The life and letters of Madame Élisabeth de France, followed by the Journal of the Temple,

Edition limited to 800 numbered sets.

The letters of Dorothy Wadham, 1609-1618;

Mode of access: Internet.

Natural history of Selborne & observations on nature; with text & new letters of the Buckland ed.;

Mode of access: Internet.