Le rôle des garanties dans les prêts des banques françaises
This paper provides new empirical evidence on the reasons why French banks use collateral. We test the relevance of the reduction of loan loss in the event of default and the resolution of adverse selection problems as satisfactory reasons for this use. We use a dataset of 564 bank loans on French firms, which contains the full information on type and value of collaterals. We then show that collateral reduces loan loss in the event of default with major differences between collaterals in terms of magnitude of the reduction. Furthermore our results reject the view that collateral would help to solve adverse selection problems.
Volume (Year): 116 (2006)
Issue (Month): 4 ()
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