Asymmetric Information And The Market Structure Of The Banking Industry

Author : Mr.Giovanni Dell'Ariccia
Publisher : International Monetary Fund
Page : 32 pages
File Size : 45,6 Mb
Release : 1998-06-01
Category : Business & Economics
ISBN : 9781451951547

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Asymmetric Information and the Market Structure of the Banking Industry by Mr.Giovanni Dell'Ariccia Pdf

The paper analyzes the effects of informational asymmetries on the market structure of the banking industry in a multi-period model of spatial competition. All lenders face uncertainty with regard to borrowers’ creditworthiness, but, in the process of lending, incumbent banks gather proprietary information about their clients, acquiring an advantage over potential entrants. These informational asymmetries are an important determinant of the industry structure and may represent a barrier to entry for new banks. The paper shows that, in contrast with traditional models of horizontal differentiation, the steady-state equilibrium is characterized by a finite number of banks even in the absence of fixed costs.

Author : Patrick Avato
Publisher : GRIN Verlag
Page : 29 pages
File Size : 52,8 Mb
Release : 2012-05
Category : Business & Economics
ISBN : 9783656180869

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Banks, Informal Money Lenders and Asymmetric Information by Patrick Avato Pdf

Seminar paper from the year 2005 in the subject Economics - Monetary theory and policy, grade: A= 1,0, Johns Hopkins University (School of Advanced International Studies (SAIS)), course: Theories and Models of Economic Development, 29 entries in the bibliography, language: English, abstract: Credit markets in developing countries differ substantially from their counterparts in OECD countries. Apart from the obvious differences in institutional development, technology and productivity which are both measures for and causes of underdevelopment, typ ical LDC credit markets have two main characteristics. Firstly, their financial systems are very small compared those in industrial economies. Secondly, developing countries are characterized by very big informal financial sectors that coexist with formal credit institutions. Interestingly, credit contracts differ highly between these two sectors and there seems to be only very limited inter-sector competition. The following paper ventures to explain the persistence of these peculiarities in rural credit markets1 using the model of asymmetric information in credit markets developed by Stiglitz and Weiss. By applying the model specifically to LDC credit markets I show that asymmetric information is among the major reasons for the underdevelopment of rural credit markets. Building on these findings I then explain how Microfinance Institutions (MFI) have lately been able to overcome some of the problems of imperfect information and strive in markets formerly dominated by informal money lenders. The first part of this paper provides an overview of the typical characteristics of credit markets in developing countries, concentrating on the limited size of LDC credit markets and on the apparent dichotomy between formal and informal finance sectors. Then, the importance of financial systems for economic development is briefly outlined in order to explain the relevance of the topic of this essay. The main part of the paper then pre

Author : Pietro Alessandrini,Michele Fratianni,Alberto Zazzaro
Publisher : Springer Science & Business Media
Page : 304 pages
File Size : 51,7 Mb
Release : 2009-06-16
Category : Business & Economics
ISBN : 9780387980782

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The Changing Geography of Banking and Finance by Pietro Alessandrini,Michele Fratianni,Alberto Zazzaro Pdf

The editors and contributors tackle a timely subject, and present rigorous research and analysis to demonstrate counter-intuitive results. In so doing, they reinforce the connections between organization and policy in the banking industry and its impact on entrepreneurship, through lending and credit to small and medium-sized businesses. The editors present a carefully organized manuscript that presents both literature reviews and the results of original empirical research that will be of interest to academics and professionals in finance, economics, and policy. The authorship and coverage are global. One of the authors, Michele Fratiani, has close ties to Springer, by virtue of his being a founding editor of Open Economies Review and co-editor of the book series, European and Transatlantic Studies.

Author : Peter D. Spencer
Publisher : OUP Oxford
Page : 286 pages
File Size : 40,8 Mb
Release : 2000-10-12
Category : Business & Economics
ISBN : 9780191586866

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The Structure and Regulation of Financial Markets by Peter D. Spencer Pdf

Aimed at advanced undergraduate and graduate students in economics, banking, and finance, this is a core textbook for the financial markets, institutions, and regulation option of courses in financial economics. It integrates modern theories of asymmetric information into the analysis of financial institutions, relating the theory to current developments. The text begins with an analysis of adverse selection in retail financial products like life assurance before looking at open capital markets where trades and prices provide information. It then progresses to the more complex areas of corporate governance and financial intermediation in which information is concealed or confidential and moral hazard and verification problems become important. These chapters study the various mechanisms that the financial markets have developed to allow investors to delegate the management of their assets to others. This analysis is used to show how regulation can reduce the risk of financial failure and how legal, accounting, and regulatory mechanisms can help shape a country's corporate and financial architecture. These difficult theoretical concepts are conveyed through the careful use of numerical illustrations and topical case studies. Each chapter ends with a set of exercises to test and reinforce students' comprehension of the material. Worked solutions are provided for the numerical exercises.

Author : Patrick Avato
Publisher : GRIN Verlag
Page : 20 pages
File Size : 54,5 Mb
Release : 2005-06-13
Category : Business & Economics
ISBN : 9783638386845

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Banks, Informal Money Lenders and Asymmetric Information by Patrick Avato Pdf

Seminar paper from the year 2005 in the subject Economics - Monetary theory and policy, grade: A= 1,0, Johns Hopkins University (School of Advanced International Studies (SAIS)), course: Theories and Models of Economic Development, 29 entries in the bibliography, language: English, abstract: Credit markets in developing countries differ substantially from their counterparts in OECD countries. Apart from the obvious differences in institutional development, technology and productivity which are both measures for and causes of underdevelopment, typ ical LDC credit markets have two main characteristics. Firstly, their financial systems are very small compared those in industrial economies. Secondly, developing countries are characterized by very big informal financial sectors that coexist with formal credit institutions. Interestingly, credit contracts differ highly between these two sectors and there seems to be only very limited inter-sector competition. The following paper ventures to explain the persistence of these peculiarities in rural credit markets1 using the model of asymmetric information in credit markets developed by Stiglitz and Weiss. By applying the model specifically to LDC credit markets I show that asymmetric information is among the major reasons for the underdevelopment of rural credit markets. Building on these findings I then explain how Microfinance Institutions (MFI) have lately been able to overcome some of the problems of imperfect information and strive in markets formerly dominated by informal money lenders. The first part of this paper provides an overview of the typical characteristics of credit markets in developing countries, concentrating on the limited size of LDC credit markets and on the apparent dichotomy between formal and informal finance sectors. Then, the importance of financial systems for economic development is briefly outlined in order to explain the relevance of the topic of this essay. The main part of the paper then presents the model of asymmetric information in credit markets pioneered by Stiglitz/Weiss as a possible explanation for the causal origins of these characteristics. The last part shows how successful microfinance institutions may succeed in operating in rural credit markets by their ability to overcome problems of imperfect information.

Author : Lewis Gaul,Viktors Steburnovs
Publisher : CreateSpace
Page : 32 pages
File Size : 48,6 Mb
Release : 2015-01-01
Category : Electronic
ISBN : 150531030X

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Ownership and Asymmetric Information Problems in the Corporate Loan Market by Lewis Gaul,Viktors Steburnovs Pdf

In credit markets, asymmetric information problems arise when borrowers have private information about their creditworthiness that is not observable by lenders. If these informational asymmetries do not negatively affect lenders' profitability, then they are irrelevant to lenders.

Author : Marcel Canoy
Publisher : Unknown
Page : 174 pages
File Size : 53,6 Mb
Release : 2001
Category : Banks and banking
ISBN : IND:30000082631064

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Competition and Stability in Banking by Marcel Canoy Pdf

The banking sector in Europe is subject to continuous change. Banks are taking up new types of business in order to diversify their risk; new players such as insurance companies, credit card providers, and non-financial companies enter market segments which used to be the territory of commercial banks; and banks increasingly operate outside their home country or merge with cross-border partners. These developments, triggered by new information technology, disintermediation, deregulation, and the arrival of the Euro, change the landscape in the banking sector and raise a number of policy issues. What are the implications for competition among banks? How can financial stability best be maintained in this changing market? Is there a conflict between increasing competition among banks and stability?

Author : Astrid A. Dick
Publisher : Unknown
Page : 56 pages
File Size : 55,8 Mb
Release : 2003
Category : Banks and banking
ISBN : CORNELL:31924096130129

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Market Structure and Quality by Astrid A. Dick Pdf

Author : R. Glenn Hubbard
Publisher : University of Chicago Press
Page : 354 pages
File Size : 41,7 Mb
Release : 2009-05-15
Category : Business & Economics
ISBN : 9780226355948

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Asymmetric Information, Corporate Finance, and Investment by R. Glenn Hubbard Pdf

In this volume, specialists from traditionally separate areas in economics and finance investigate issues at the conjunction of their fields. They argue that financial decisions of the firm can affect real economic activity—and this is true for enough firms and consumers to have significant aggregate economic effects. They demonstrate that important differences—asymmetries—in access to information between "borrowers" and "lenders" ("insiders" and "outsiders") in financial transactions affect investment decisions of firms and the organization of financial markets. The original research emphasizes the role of information problems in explaining empirically important links between internal finance and investment, as well as their role in accounting for observed variations in mechanisms for corporate control.

Author : Ricardo N. Bebczuk
Publisher : Cambridge University Press
Page : 176 pages
File Size : 45,5 Mb
Release : 2003-08-21
Category : Business & Economics
ISBN : 0521797322

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Asymmetric Information in Financial Markets by Ricardo N. Bebczuk Pdf

Asymmetric information (the fact that borrowers have better information than their lenders) and its theoretical and practical evidence now forms part of the basic tool kit of every financial economist. It is a phenomenon that has major implications for a number of economic and financial issues ranging from both micro and macroeconomic level - corporate debt, investment and dividend policies, the depth and duration of business cycles, the rate of long term economic growth - to the origin of financial and international crises. Asymmetric Information in Financial Markets aims to explain this concept in an accessible way, without jargon and by reducing mathematical complexity. Using elementary algebra and statistics, graphs, and convincing real-world evidence, the author explores the foundations of the problems posed by asymmetries of information in a refreshingly accessible and intuitive way.

Author : David VanHoose
Publisher : Unknown
Page : 0 pages
File Size : 50,9 Mb
Release : 2022
Category : Electronic
ISBN : 3031162420

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The Industrial Organization of Banking by David VanHoose Pdf

This book provides an evaluation of the industrial organization of banking with a focus on the interrelationship among bank behavior, market structure, and regulation. It addresses a wide range of public policy topics, including bank competition and risk, international banking, antitrust issues, and capital regulation. New to this edition, which has been updated throughout, is a broadened consideration of alternative theories of competition among banks, which includes discussions of such issues as the implications of large increases in bank reserve holdings in recent years, effects of nonprice competition through quality rivalry, analysis of mixed market structures involving both large and small banks, and international interactions of banks and policymakers. The intent of the book is to serve as a learning tool and reference for graduate students, academics, bankers, and policymakers seeking to better understand the industrial organization of the banking sector and the effects of banking regulations.

Author : Theo Lynn,John G. Mooney,Pierangelo Rosati,Mark Cummins
Publisher : Springer
Page : 194 pages
File Size : 42,8 Mb
Release : 2018-12-06
Category : Business & Economics
ISBN : 9783030023300

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Disrupting Finance by Theo Lynn,John G. Mooney,Pierangelo Rosati,Mark Cummins Pdf

This open access Pivot demonstrates how a variety of technologies act as innovation catalysts within the banking and financial services sector. Traditional banks and financial services are under increasing competition from global IT companies such as Google, Apple, Amazon and PayPal whilst facing pressure from investors to reduce costs, increase agility and improve customer retention. Technologies such as blockchain, cloud computing, mobile technologies, big data analytics and social media therefore have perhaps more potential in this industry and area of business than any other. This book defines a fintech ecosystem for the 21st century, providing a state-of-the art review of current literature, suggesting avenues for new research and offering perspectives from business, technology and industry.

Author : R. Glenn Hubbard,National Bureau of Economic Research
Publisher : University of Chicago Press
Page : 420 pages
File Size : 53,6 Mb
Release : 1991-08-13
Category : Business & Economics
ISBN : 0226355888

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Financial Markets and Financial Crises by R. Glenn Hubbard,National Bureau of Economic Research Pdf

Warnings of the threat of an impending financial crisis are not new, but do we really know what constitutes an actual episode of crisis and how, once begun, it can be prevented from escalating into a full-blown economic collapse? Using both historical and contemporary episodes of breakdowns in financial trade, contributors to this volume draw insights from theory and empirical data, from the experience of closed and open economies worldwide, and from detailed case studies. They explore the susceptibility of American corporations to economic downturns; the origins of banking panics; and the behavior of financial markets during periods of crisis. Sever papers specifically address the current thrift crisis—including a detailed analysis of the over 500 FSLIC-insured thrifts in the southeast—and seriously challenge the value of recent measures aimed at preventing future collapse in that industry. Government economists and policy makers, scholars of industry and banking, and many in the business community will find these timely papers an invaluable reference.

Author : Aslı Demirgüç-Kunt,Ross Levine
Publisher : MIT Press
Page : 452 pages
File Size : 43,6 Mb
Release : 2001
Category : Business & Economics
ISBN : 0262541793

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Financial Structure and Economic Growth by Aslı Demirgüç-Kunt,Ross Levine Pdf

CD-ROM contains: World Bank data.

Author : Bayar, Yilmaz
Publisher : IGI Global
Page : 699 pages
File Size : 42,6 Mb
Release : 2020-11-06
Category : Political Science
ISBN : 9781799844600

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Handbook of Research on Institutional, Economic, and Social Impacts of Globalization and Liberalization by Bayar, Yilmaz Pdf

Globalization is a multi-dimensional concept reflecting the increased economic, social, cultural, and political integration of countries. There has been no pinpointed consensus on the history of globalization; however, the globalization process has gained significant speed as of the 1980s in combination with liberalization. Many countries have removed or loosened barriers over the international flows of goods, services, and production factors. In this context, both liberalization and globalization have led to considerable institutional, economic, social, cultural, and political changes in the world. The liberalization and globalization processes have affected economic units, institutions, cultures, social lives, and national and international politics. The Handbook of Research on Institutional, Economic, and Social Impacts of Globalization and Liberalization provides a comprehensive evaluation of the institutional, economic, and social impacts of globalization and liberalization processes across the world. While highlighting topics like economics, finance, business, and public administration, this book is ideally intended for government officials, policymakers, practitioners, stakeholders, researchers, and academicians interested in the international impacts of globalization and liberalization across a variety of different domains.