| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP1330 |
| DP1330 High Yields: The Spread on German Interest Rates | |
| Luigi Spaventa; Francesco Giavazzi; Carlo A. Favero | |
| 发表日期 | 1996-01-31 |
| 出版年 | 1996 |
| 语种 | 英语 |
| 摘要 | This paper analyses in a formal model the problem of achieving financial discipline in a transitional economy with bank-intermediated finance. Even if banks have no intrinsic interest in refinancing unprofitable firms, they may still exploit the softness of government. By gambling for government bailouts, banks contribute to softening the budget constraints of enterprises. We show that the poor quality of loan portfolios, the absence of collateral and low bank capitalization are key elements explaining soft budget constraints and repeated bank bailouts in transitional economies. Bank reserves help in hardening budget constraints, but high initial levels of capitalization are necessary to mitigate potential negative effects of a credit crunch for enterprises. We show that the trade-off between hardness and enterprise liquidity is more severe when loan portfolios are of poor quality. A similar trade-off arises if a bank invests in screening or monitoring projects to improve the quality of portfolios. Under certain conditions the government should make capitalization contingent on banks investing in monitoring and screening in order to obtain hard budget constraints rather than to let banks use reserves for such investments. We further show that transfers of all non-performing loans to a separate institution, a hospital agency, is never optimal, whereas partial transfers may serve to harden budget constraints. |
| 主题 | Financial Economics |
| 关键词 | Bank restructuring Financial transition Soft budget constraints |
| URL | https://cepr.org/publications/dp1330 |
| 来源智库 | Centre for Economic Policy Research (United Kingdom) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/530467 |
| 推荐引用方式 GB/T 7714 | Luigi Spaventa,Francesco Giavazzi,Carlo A. Favero. DP1330 High Yields: The Spread on German Interest Rates. 1996. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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