Credit risk

About: Credit risk is a research topic. Over the lifetime, 18595 publications have been published within this topic receiving 382866 citations.

Bank borrowing constraints and the demand for trade credit: evidence from panel data

Abstract: Monetary policy contractions exacerbate credit constraints stemming from asymmetric information, incentive problems and limited collateral. During such periods financial intermediaries reduce the supply of credit to smaller businesses. Although trade credit is a less desirable alternative of corporate financing, it may play a special role in alleviating credit rationing. This paper is an empirical investigation of the interaction of monetary policy, credit market conditions and corporate financing over the business cycle. It provides a simple test of the existence of a credit channel of monetary policy transmissions. Using individual firm data we find that during periods of tight money the proportion of bank-borrowing constrained firms increases. Borrowing constrained films are found to substitute away from bank credit to trade credit. Such evidence supports the existence of a credit channel of monetary policy transmission: firms do not voluntarily cut bank loans (e.g. because of demand slowdown) since they increase their demand for a less desirable alternative (trade credit). Copyright © 2003 John Wiley & Sons, Ltd.

Banking credit worthiness: Evaluating the complex relationships

Abstract: In developing economies agriculture and farming play crucial roles for economic sustainable development. Farmer credit risk evaluation is an important issue when determining financial support to farmers, improving agricultural supply chain performance, and ensuring profitability of financial institutions. Credit risk evaluation, or creditworthiness, is not a trivial exercise due to various complexities. Honoring complexity is necessary to effectively evaluate and predict farmer creditworthiness. A methodology using fuzzy rough-set theory and fuzzy C-means clustering is used to evaluate and investigate the complex relationships between farmer characteristics, competitive environmental factors, and farmer credit level. The methodology is detailed using actual bank data from 2044 farmers within China. This empirical methodology generates decision rules that provide insight to more complex relationships than can be found through standard econometric multivariate approaches. A rule-based methodological outcome can be used to predict the creditworthiness of farmers and to aid in agricultural loan decision making. Prediction accuracy of the rule-base was 81.16%. A central finding is that education and skills related characteristics are important for determining farmer credit-worthiness. Other implications are presented along with study limitations and future research directions.

The End of Finance

Abstract: Introduction Part One: Phenomenology I. Do we know what the financial markets are? II. At the root of the possibility of crisis: liquidity and risk III. What is credit? IV. What is money? V. Finance starting from the end VI. Capitalism and debt: a matter of life and death Part Two: History I. From credit risk to liquidity risk (2008) II. The globalization of capital (1973) III. Fiat dollar'. And the world saw that it was good (1971) IV. The Eurodollar chimera (1958) V. The European Payments Union (1950) VI. Bretton Woods: the plan that might have made it (1944) VII. Bretton Woods: the system that found implementation (1944) VIII. The crisis paradigm (1929) IX. Orchestra Rehearsal X. Money before and after the gold standard (1717) XI. The Bank of England and power currency (1694) XII. The International Currency of the Trade Fairs (1579) Part Three: Politics I. Double or quits? II. The way out of liquidity: the Gordian knot and utopia III. Prevention or cure? The structural paradox of the anti-crisis policies IV. The other finance V. The (rare) "green shoots" of a possible reform VI. If not now, when?