IMF loans react to economic conditions but are also sensitive to political-economy variables. Loans tend to be larger and more frequent when a country has a bigger quota and more professional staff at the IMF and when a country is more connected politically and economically to the United States and other major shareholding countries of the IMF. These results are of considerable interest for the...

Stock loan is different from the traditional loan, it needs to be collateralized by stock. Fairly valuing stock loan is very important for financial market participants. The main contribution of this paper is to give a valuing method of stock loan in uncertain environment. Under the assumption that the underlying stock price follows an uncertain mean-reverting stock model, the price formulas of...

Riskiness of a particular loan can be estimated based on several of its economic indicators. Although the actual relationship is very complicated, it is possible to construct a simplified model which can roughly classify a loan into one of the three categories high risk loan, medium risk loan and low risk loan based on certain criteria. This paper seeks to build such a model based on publicly a...

To understand better the role of loan officers in the origins of the financial crisis, we study a controlled experiment conducted by a large bank. In the experiment, the incentive structure of a subset of small business loan officers was changed from fixed salary to commission-based compensation. We use a diffin-diff design to show that while the characteristics of loan applications did not cha...

We examine whether banks, in providing financing for the deals, monitor firms mergers and acquisitions to the extent that will benefit acquirers shareholders. Inconsistent with the conventional theoretical argument, we do not find that bank-financed deals are associated with better stock or accounting performance than bond-financed deals or deals paid with internal cash. There is strong evidenc...

Collateralized loan obligation (CLO) volume has increased significantly over the past two years (see chart, page 2). Third-quarter 1997 issuance hit a record-breaking $25.5 billion, more than doubling the 1996 volume of $11.5 billion. Furthermore, by year end, it is estimated that the total volume for collateralized bond obligations (CBOs) and CLOs will reach $35 billion– $40 billion. With larg...

We study the effects of physical distance on the acquisition and use of private information in informationally opaque credit markets. Using a unique data set of all loan applications by small firms to a large bank, we show that borrower proximity facilitates the collection of soft information, leading to a trade-off in the availability and pricing of credit, which is more readily accessible to ...

The price elasticity of demand for credit has major implications for macroeconomics, finance, and development. We present estimates of this parameter derived from a randomized trial. The experiment was implemented by a consumer microfinance lender in South Africa and identifies demand curves that, while downward-sloping with respect to price, are flatter than recent estimates in both developing...