Lending to Lemons: Landschafts-Credit in 18th Century Prussia
The following paper describes the emergence of cooperative mortgage credit associations, called "Landschaften" in 18th century Prussia, and thereby tells the history of mortgage-covered bonds. Landschaften facilitated the refinancing of loans for Prussian estates by issuing covered bonds (Pfandbriefe) that were jointly backed by their members. They relied on dual recourse, cooperative structure, joint liability, and local administration to overcome asymmetric information problems related to lending. Their emergence serves as an example for financial innovation in historical mortgage markets. Pfandbriefe exist to this day and are known for their security. Their success goes back to some of the historical features.
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|Date of creation:||Jun 2013|
|Date of revision:|
|Publication status:||published as Lending to Lemons: Landschafts Credit in Eighteenth-Century Prussia , Kirsten Wandschneider. in Housing and Mortgage Markets in Historical Perspective , White, Snowden, and Fishback. 2014|
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- repec:cup:cbooks:9780521810203 is not listed on IDEAS
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- Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
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