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Passive Creditors

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Author Info
K. SCHOORS ()
K. SONIN

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Abstract

Creditors are often passive because they are reluctant to show bad debts on their own balance sheets. In transition economies this problem is particularly severe. In this note, we analyze a simple general equilibrium model, which allows to study the externality effect of creditor passivity. The model yields rich insights in the phenomenon of creditor passivity, both in transition countries and developed market economies and allows to derive policy implications to solve creditor passivity. Our model explains in what respect banks are different from enterprises as creditors and what this implies for policy. Phenomenons that are commonly observed in banking, such as deposit insurance, government coordination to work out bad loans, and special bankruptcy proceedings for banks, are explained by this.

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Paper provided by Ghent University, Faculty of Economics and Business Administration in its series Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium with number 03/177.

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Length: 40 pages
Date of creation: May 2003
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Handle: RePEc:rug:rugwps:03/177

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Sophie Claeys, & Gleb Lanine & Koen Schoors, 2005. "Bank Supervision Russian style: Rules versus Enforcement and Tacit Objectives," William Davidson Institute Working Papers Series wp778, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
    Other versions:
  2. Marcos Yamada Nakaguma & Siegfried Bender, 2004. "A Emenda Da Reeleição E A Lei De Responsabilidade Fiscal: Impactos Sobre Ciclos Políticos E Performance Fiscal Dos Estados (1986-2002)," Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32th Brazilian Economics Meeting] 025, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
  3. Irina Slinko & Evgeny Yakovlev & Ekaterina Zhuravskaya, 2003. "Laws for Sale: Evidence from Russia," Working Papers w0031, Center for Economic and Financial Research (CEFIR). [Downloadable!]
    Other versions:
  4. Claeys, Sophie & Schoors, Koen, 2007. "Bank supervision Russian style: Evidence of conflicts between micro- and macroprudential concerns," Working Paper Series 205, Sveriges Riksbank (Central Bank of Sweden). [Downloadable!]
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  5. S. CLAEYS & G. LANINE & K. SCHOORs, 2005. "Bank Supervision Russian Style: Rules vs Enforcement and Tacit Objectives," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 05/307, Ghent University, Faculty of Economics and Business Administration. [Downloadable!]
  6. Svetlana Andrianova, 2007. "On Corruption and Institutions in Decentralized Economies," Topics in Theoretical Economics, Berkeley Electronic Press, vol. 7(1), pages 1353-1353. [Downloadable!] (restricted)
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  7. Zakolyukina Anastasia, 2006. "Bankrtuptcy in Russia: External Management Performance," EERC Working Paper Series 06-09e, EERC Research Network, Russia and CIS. [Downloadable!]
  8. D. Van Den Poel, 2003. "Predicting Mail-Order Repeat Buying: Which Variables Matter?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/191, Ghent University, Faculty of Economics and Business Administration. [Downloadable!]
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