Costly Collateral and the Public Supply of Liquidity /

This paper addresses two complications arising from the use of collateral requirements in debt contracts between wealth-constrained entrepreneurs and banks. First, costly asset liquidation is found to enhance the susceptibility of debt finance to interest rate volatility. Second, aggregate uncertain...

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Hlavní autor: Schellekens, Philip
Médium: Časopis
Jazyk:English
Vydáno: Washington, D.C. : International Monetary Fund, 2000.
Edice:IMF Working Papers; Working Paper ; No. 2000/125
On-line přístup:Full text available on IMF
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245 1 0 |a Costly Collateral and the Public Supply of Liquidity /  |c Philip Schellekens. 
264 1 |a Washington, D.C. :  |b International Monetary Fund,  |c 2000. 
300 |a 1 online resource (24 pages) 
490 1 |a IMF Working Papers 
500 |a <strong>Off-Campus Access:</strong> No User ID or Password Required 
500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a This paper addresses two complications arising from the use of collateral requirements in debt contracts between wealth-constrained entrepreneurs and banks. First, costly asset liquidation is found to enhance the susceptibility of debt finance to interest rate volatility. Second, aggregate uncertainty in conjunction with limited bank capitalization is shown to produce excessive credit constraints that, under certain conditions, justify the public supply of liquidity. The paper suggests applications with respect to models of interest rate smoothing and self-fulfilling currency crises. 
538 |a Mode of access: Internet 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2000/125 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2000/125/001.2000.issue-125-en.xml  |z IMF e-Library