Credit Rationing and Internal Ratings in the face of Innovation and Uncertainty

Guido Fioretti

Finance from University Library of Munich, Germany

Abstract: Some empirical investigations are pointing to the fact that high-tech firms are subject to credit rationing to a higher extent than the average. This excess of credit rationing may not be due to information asymmetries, but rather to the inability of credit institutions to screen projects in novel fields. This article provides a model of this phenomenon and explores its implications in the light of recent changes in the screening procedures of major banks. In particular, the changes to be made in order to comply with the ``Basel II'' accord emphasize the impact of screening procedures on credit rationing.

Keywords: Credit rationing; High-Tech Firms; Internal Rating Systems; Basel II (search for similar items in EconPapers)
JEL-codes: G (search for similar items in EconPapers)
Pages: 22 pages
Date: 2005-04-28
New Economics Papers: this item is included in nep-cfn, nep-ent and nep-ino
Note: Type of Document - pdf; pages: 22. Submitted to 'Economic Notes'
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpfi:0504021

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