On the Use of Collateral

Giuseppe Coco ()

Discussion Papers from University of Exeter, School of Business and Economics

Abstract: This paper surveys existing explanations for the use of collateral in credit markets and relates them to the empirical evidence on the subject. Collateral may be used as a screening or an incentive device in markets characterized by various forms of asymmetric and biased information. The evidence is incompatible with the use of collateral as a signal of projects' quality, while broadly consistent with explanations based on its incentive properties and asymmetric evaluation of projects.

Keywords: CREDIT; CREDIT SYSTEMS; INFORMATION; CREDIT POLICY; RATIONING 4RJ. 28p. (search for similar items in EconPapers)
JEL-codes: D82 G14 (search for similar items in EconPapers)
Date: 1998

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: On the Use of Collateral (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:fth:exetec:98/05

Ordering information: This working paper can be ordered from
http://www.exeter.ac ... search/Research.html

Access Statistics for this paper

More papers in Discussion Papers from University of Exeter, School of Business and Economics
Address: School of Business and Economics University of Exeter Streatham Court Rennes Drive Exeter EX4 4PU
Contact information at EDIRC.
Series data maintained by Thomas Krichel ().