1.

Record Nr.

UNINA9910463632803321

Autore

Hardy Daniel C

Titolo

Innovation in banking and excessive loan growth / / Daniel C. Hardy and Alexander F. Tieman

Pubbl/distr/stampa

[Washington, District of Columbia] : , : International Monetary Fund, , 2008

©2008

ISBN

1-4623-4873-4

1-4527-2990-5

1-4518-7046-9

9786612841392

1-282-84139-4

Descrizione fisica

1 online resource (30 p.)

Collana

IMF Working Papers

IMF working paper ; ; WP/08/188

Altri autori (Persone)

TiemanAlexander F

Disciplina

332.1753

Soggetti

Bank loans - Econometric models

Electronic books.

Lingua di pubblicazione

Inglese

Formato

Materiale a stampa

Livello bibliografico

Monografia

Note generali

Description based upon print version of record.

Nota di bibliografia

Includes bibliographical references.

Nota di contenuto

Contents; I. Introduction; Figures; 1. Change in the ratio of credit to GDP, 2003-2007; II. The Model; Tables; 1. Expected Payoffs in Different States; III. Model Analysis; A. Full Information; B. Equilibria with Partial Information and Two Bank Types; Pooling; Separating; A parameterized example; C. Separating Equilibrium with Partial Information and a Continuum of Bank Types; 2. The Value Function for Different Types: Separating Equilibrium; IV. Extensions; A. Investment in Loan Technology; 3. Credit Volumes and Bank Characteristics for a Continuum of Types

2. Investment Decision Starting From and Ending at Pooling EquilibriaB. Pervasive Moral Hazard and Low-Credit Outcomes; 3. Investment Decision Starting From and Ending at Separating Equilibria; 4. Separating Equilibrium with Low Credit Volume; V. Summary and Conclusions; 5. Pooling Equilibrium with Low Credit Volume; References; Appendix; I: Expected Loan Losses in a Pooling Equilibrium;



II: Regularity Conditions on the Objective Function with a Continuum of Bank Types

Sommario/riassunto

The volume of credit extended by a bank can be an informative signal of its abilities in loan selection and management. It is shown that, under asymmetric information, banks may therefore rationally lend more than they would otherwise in order to demonstrate their quality, thus negatively affecting financial system soundness. Small shifts in technology and uncertainty associated with new technology may lead to large jumps in equilibrium outcomes. Prudential measures and supervision are therefore warranted.