We derive an optimal dynamic lending contract in a simple adverse selection model with limited commitment on the borrower side. An optimal contract involves “penalty” rates after a default, and favorable rates after a success. It also charges higher rates for first-time borrowers than for repeat borrowers, as in “relationship” lending. We compare the efficiency of a group lending contract (of t...

The publication of the ‘Fed Boston Study’ drew considerable attention to the long-standing issue of discrimination of minorities in mortgage lending. Federal regulators have since stepped up their efforts to enforce greater compliance of banks with various fair-lending laws. Stengel & Glennon (1999), in their influential paper, offered the industry a statistical methodology that individual bank...

Monetary environment as the core of financial system has been functionally designed in light of the new set of extensive goals including financial stability, sustainable noninflationary growth, external sustainability, and price stability. A comprehensive monetary policy framework is proposed for Iran which systematically include the new goals, stance variables, instruments, transmission mechan...

Recently, P2P lending has become a hot research topic in finance, especially after the global financial crisis. Most existing research did not consider the efficiency from the borrowers’ perspective. This paper proposes a decision support system based on intelligent agents in P2P Lending for borrowers. The system provides borrowers with individual risk assessment, eligible lender search, lendin...

This paper studies the impact of geographic banking deregulation on the effectiveness of monetary policy. State-level removal of restrictions on interstate banking strengthened the effect of monetary policy on bank lending. This effect was driven by small banks affiliated with bank holding companies. Following interstate deregulation affiliated banks reallocate assets towards securities and awa...