01747cas a2200241 a 4500 AALejournalIMF003863 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451862416 1018-5941 BD-DhAAL BD-DhAAL Blavy, Rodolphe. Monitoring and Commitment in Bank Lending Behavior / Rodolphe Blavy. Washington, D.C. : International Monetary Fund, 2005. 1 online resource (34 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The paper proposes a theoretical argument on the nature of bank lending, based on the idea that, through commitment and monitoring, banks overcome basic informational asymmetries with borrowers. By bringing together loan commitment theories and credit rationing theories, the paper shows that, within a framework of asymmetric information between lenders and borrowers and under costly termination of lending arrangements, commitment may explain the accumulation of nonperforming loans by banks. Two additional results follow: (i) that banks favor borrowers with well-known production functions and long-term credit history; and (ii) that interest rate spreads may be large if significant market imperfections prevail. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2005/222 Full text available on IMF http://elibrary.imf.org/view/journals/001/2005/222/001.2005.issue-222-en.xml IMF e-Library