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Journal Article
Stock prices and output growth: an examination of the credit channel
When stock market values fall, we know that investors expect lower economic growth in the future. But can stock market declines actually affect future growth? There is some evidence that they can-through the credit channel.
Conference Paper
The impact of explicit deposit insurance on market discipline
This paper examines the interaction between market discipline and explicit or implicit deposit insurance using the experiences of Bolivia during the period 1998:1 to 2003:12. The country-specific circumstances during this period allow us to investigate the effect of explicit deposit insurance on market discipline in a setup that resembles a controlled experiment. Contrary to other studies on developing countries, we find a strong link between bank fundamentals and the supply of deposits, which is consistent with the hypothesis that market discipline is at work. The results also suggest that ...
Conference Paper
Monetary policy and bank supervision
Working Paper
Tests of ex ante versus ex post theories of collateral using private and public information
Collateral is a widely used, but not well understood, debt-contracting feature. Two broad strands of theoretical literature explain collateral as arising from the existence of either ex ante private information or ex post incentive problems between borrowers and lenders. However, the extant empirical literature has been unable to isolate each of these effects. This paper attempts to do so using a credit registry that is unique in that it allows the researcher to have access to some private information about borrower risk that is unobserved by the lender. The data also include public ...
Working Paper
Reexamining the empirical relation between loan risk and collateral: the roles of collateral characteristics and types
This paper offers a possible explanation for the conflicting empirical results in the literature concerning the relation between loan risk and collateral. Specifically, we posit that different economic characteristics or types of collateral pledges may be associated with the empirical dominance of the four different risk-collateral channels implied by economic theory. For our sample, collateral overall is associated with lower loan risk premiums and a higher probability of ex post loan nonperformance (delinquency or default). This finding suggests that the dominant reason collateral is ...