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Credit Availability in the crisis: which role for the European Investment Bank Group?

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  • Alessandro Fedele
  • Andrea Mantovani
  • Francesco Liucci

Abstract

In this paper we consider a moral hazard problem between a creditworthy firm which needs funding and a bank. We first study under which conditions the firm does not obtain the loan. We then determine whether and how the intervention of an external financial institution can facilitate the access to credit. In particular, we focus on the European Investment Bank Group (EIBG), which provides (i) specific credit lines to help banks that finance small and medium-sized enterprises (SMEs) and (ii) guarantees for portfolios of SMEs'loans. We show that only during crises the EIBG intervention allows to totally overcome the credit crunch.

Suggested Citation

  • Alessandro Fedele & Andrea Mantovani & Francesco Liucci, 2010. "Credit Availability in the crisis: which role for the European Investment Bank Group?," Working Papers 1005, University of Brescia, Department of Economics.
  • Handle: RePEc:ubs:wpaper:1005
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    References listed on IDEAS

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    Cited by:

    1. Zeilbeck, Severin, 2015. "An investment initiative for fiscally constrained EU member states: The role of synergetic financial instruments," IPE Working Papers 58/2015, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    2. Cheng Wang & Stephen D. Williamson, 1998. "Debt Contracts with Financial Intermediation with Costly Screening," Canadian Journal of Economics, Canadian Economics Association, vol. 31(3), pages 573-595, August.
    3. Judith CLIFTON & Daniel DÍAZ-FUENTES & JULIO REVUELTA, 2013. "Explaining Infrastructure Investment Decisions at the European Investment Bank 1958-2004," Departmental Working Papers 2013-06, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.

    More about this item

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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