Collateral and competition
The authors examine the effects of changes in competitive conditions on the structure of loan contracts. In particular, they present conditions in which greater loan market competition reduces the stringency of contractual collateral requirements, a prediction that is consistent with anecdotal evidence from loan markets. The authors also analyze the interaction between the degree of competition and the efficiency of contractual renegotiation. Insufficiently competitive markets may lead to bargaining difficulties that reduce the efficiency of renegotiable contracts. At low levels of competition negotiable contracts remain feasible only if collateral levels are inefficiently low.
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- Stanley D. Longhofer & João A.C. Santos, 1998.
"The importance of bank seniority for relationship lending,"
9808, Federal Reserve Bank of Cleveland.
- Longhofer, Stanley D. & Santos, Joao A. C., 2000. "The Importance of Bank Seniority for Relationship Lending," Journal of Financial Intermediation, Elsevier, vol. 9(1), pages 57-89, January.
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- João A. C. Santos & Stanley D. Longhofer, 1998. "The importance of bank seniority for relationship lending," BIS Working Papers 58, Bank for International Settlements.
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CSEF Working Papers
10, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
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- Shouyong Shi & Melanie Cao, 1999.
"Screening, Bidding, and the Loan Market Tightness,"
989, Queen's University, Department of Economics.
- Melanie Cao & Shouyong Shi, 1999. "Screening, Bidding, and the Loan Market Tightness," Cahiers de recherche CREFE / CREFE Working Papers 80, CREFE, Université du Québec à Montréal.
- Melanie Cao & Shouyong Shi, 2000. "Screening, Bidding, and the Loan Market Tightness," Center for Financial Institutions Working Papers 00-09, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Gary Gorton & Andrew Winton, 2002.
Center for Financial Institutions Working Papers
02-28, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Robert Hauswald & Robert Marquez, 2003. "Information Technology and Financial Services Competition," Review of Financial Studies, Society for Financial Studies, vol. 16(3), pages 921-948, July.
- Caminal, Ramon & Matutes, Carmen, 1997.
"Can Competition in the Credit Market be Excessive?,"
CEPR Discussion Papers
1725, C.E.P.R. Discussion Papers.
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Elsevier, vol. 2(2), pages 95-133, June.
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The Quarterly Journal of Economics,
MIT Press, vol. 110(2), pages 407-43, May.
- Mitchell A. Petersen & Raghuram G. Rajan, 1994. "The Effect of Credit Market Competition on Lending Relationships," NBER Working Papers 4921, National Bureau of Economic Research, Inc.
- Rajan, Raghuram G, 1992. " Insiders and Outsiders: The Choice between Informed and Arm's-Length Debt," Journal of Finance, American Finance Association, vol. 47(4), pages 1367-400, September.
- Manove, Michael & Padilla, A Jorge & Pagano, Marco, 2001. "Collateral versus Project Screening: A Model of Lazy Banks," RAND Journal of Economics, The RAND Corporation, vol. 32(4), pages 726-44, Winter.
- Broecker, Thorsten, 1990. "Credit-Worthiness Tests and Interbank Competition," Econometrica, Econometric Society, vol. 58(2), pages 429-52, March.
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