Consumer credit is a lucrative but risky business. In order to control risk and maximize profits, commercial banks around the world have made great efforts to develop various analytic models to identify potential default loan applicants. This is also critically important to China, as the non-performing individual loans of Chinese commercial banks have been fast growing because of the myopic bus...

We investigate whether cultural differences between professional decision-makers affect financial contracts in a large dataset of international syndicated bank loans. We find that lead banks offer smaller loans at a higher interest rate to more culturally distant borrowers. Furthermore, lead banks are more likely to require third-party guarantees as cultural distance with the borrower increases...

Using panel data, this paper tries to explain the amount of loans granted by the IBRD and it analyzes their effect on monetary and fiscal policies in the recipient countries. To check for political business cycles, the influence of elections on IBRD loans is examined. The results obtained support the hypothesis that net flows are higher prior to elections. With respect to moral hazard it is sho...

Only few studies exist concerning the recovery rate of bank loans. The recovery rate is defined as the payback quota of a defaulted borrower. Prediction models of recovery rates are gaining in importance because of the Basel II-reform and the impact for the credit risk management, the calculation of interest rates and the results of credit risk models. Factors that influence the recovery rate c...

Previously circulated under the title \Banks and credit derivatives: Is it always good to have more risk management tools?" Abstract We model the eeects on banks of the introduction of a market for credit derivatives; in particular, credit default swaps. A bank can use such swaps to temporarily transfer credit risks of their loans to others, reducing the likelihood that defaulting loans trigger...

Within less than a decade the World Bank has become the largest single source of finance (loans) for health in low and middle income countries as well as a major player in the field of pharmaceuticals. Often 20-50% of the recurrent government health budget in developing countries is used to procure drugs. Drugs are among the most salient and cost-effective elements of health care and often a ke...

*the views expressed here are those of the author and do not necessarily represent the views of the Federal reserve bank of Philadelphia or the Federal reserve system. you’ve probably heard of reverse mortgage loans. but even though these loans have been getting more attention in the media and in academia, it’s possible that you’re still not sure about what reverse mortgages really are.1 ost pe...

This ethnographic case study is taken from Kenieroba, western Mali, a region characterized by limited transportation, industry, and commercial agriculture. Openended interviews with women, performed in all 35 households, show that effective microcredit programs require transparency, accountability, capacity building elements, a staff knowledgeable about local economic conditions, and agents who...

Loans are the largest source of income from banks compared to other sources income. To ensure bank continuity, Bank must exist interest on loans, reaching almost 95% all activities. For companies and that apply loan differences, loans receivables which cash is delayed in receipt. Having problem can weaken a bank's financial condition. In general, two factors cause problems with namely internal ...

We prove the existence of monetary equilibrium in a finite horizon economy with production. We also show that if agents expect the monetary authority to significantly decrease the supply of bank money available for short term loans in the future, then the economy will fall into a liquidity trap today.