Access and risk - friends or foes? Lessons from Chile
AbstractThis paper documents the link between risk, stability, and access to credit markets in an emerging economy. It presents annual credit loss distributions of Chilean banks for the period 1999-2005, providing the first empirical evidence of the cyclical pattern of expected losses and unexpected losses of bank loan portfolios in emerging countries. The paper provides three main contributions to the debate on bank solvency and access to credit markets. First, it derives nonparametric estimators of expected losses and unexpected losses, free from model error and, in particular, from distributional restrictions. Second, it shows how the distribution of credit losses for portfolios of retail and commercial loans is affected by the lumpiness of bank loans. Finally, it shows that the shape of credit loss distributions helps select appropriate policies to promote broader and sounder access to bank credit for the poor and the unbanked.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4003.
Date of creation: 01 Sep 2006
Date of revision:
Banks&Banking Reform; Investment and Investment Climate; Financial Intermediation; Economic Theory&Research; Insurance&Risk Mitigation;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-09-16 (All new papers)
- NEP-BAN-2006-09-16 (Banking)
- NEP-FIN-2006-09-16 (Finance)
- NEP-FMK-2006-09-16 (Financial Markets)
- NEP-IAS-2006-09-16 (Insurance Economics)
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.:
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- Robert Cull & Asl? Demirgüç-Kunt & Timothy Lyman, 2012. "Financial Inclusion and Stability : What Does Research Show?," World Bank Other Operational Studies 9443, The World Bank.
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