Title of article :
Moralhazardandadverseselectionintheoriginate-to-distribute
model ofbankcredit
Author/Authors :
Antje Berndt، نويسنده ,
Issue Information :
روزنامه با شماره پیاپی سال 2008
Abstract :
Bank credithasevolvedfromthetraditionalrelationshipbankingmodeltoanoriginate-
to-distribute model.Weshowthattheborrowerswhoseloansaresoldinthesecondary
market underperformtheirpeersbyabout9%peryear(risk-adjusted)overthethree-
yearperiodfollowingtheinitialsaleoftheirloans.Therefore,eitherbanksare
originatingandsellingloansoflowerqualityborrowersbasedonunobservableprivate
information(adverseselection),and/orloansalesleadtodiminishedbankmonitoring
that affectsborrowersnegatively(moralhazard).Weproposeregulatoryrestrictionson
loan sales,increaseddisclosure,andaloantradingexchange/clearinghouseas
mechanismstoalleviatetheseproblems.
Keywords :
Syndicated loansSecondary loanmarketOriginate-to-distributeMoral hazardAdverseselection
Journal title :
Journal of Monetary Economics
Journal title :
Journal of Monetary Economics
