The credit risk-contingency system of an Asian development bank

Robert Townsend and Jacob Yaron

Economic Perspectives, 2001, vol. 25, issue Q III, 31-48

Abstract: This article offers a new method for the evaluation of financial institutions, one that combines socioeconomic survey data with appropriate accounting standards. A government-operated development bank in Thailand is found to be offering a risk-contingency or insurance system while being regulated as a more standard, loan-generating bank. Farmer clients experiencing adverse shocks receive indemnities that improve their well-being. With proper provisioning and accounts, that welfare gain could be weighed against premia or government subsidies.

Keywords: Financial crises - Asia; Financial institutions - Thailand; Thailand (search for similar items in EconPapers)
Date: 2001
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