Credit Rationing with Symmetric Information
Guido Fioretti
MPRA Paper from University Library of Munich, Germany
Abstract:
Without denying the importance of asymmetric information, this article purports the view that credit rationing may also originate from a lender's inability to classify loan applicants in proper risk categories. This effect is particularly strong when novel technologies are involved. Furthermore, its relevance may increase with the importance assigned to internal rating systems by the Basel accord. This article presents a measure of the inadequacy of a lender's classification criteria to the qualitative features of prospective borrowers. Even without information asymmetries, credit rationing may occur if this quantity reaches too high a value. Furthermore, some general principles are outlined, that may be used by lenders in order to change their classification criteria.
Keywords: Credit Rationing; Risk Categories; Internal Rating Systems; Deciding not to Decide; Problem Decomposition (search for similar items in EconPapers)
JEL-codes: D89 E41 (search for similar items in EconPapers)
Date: 2008-04-09
New Economics Papers: this item is included in nep-ban, nep-cbe, nep-ore and nep-rmg
References: View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/8201/1/MPRA_paper_8201.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/16980/1/MPRA_paper_16980.pdf revised version (application/pdf)
Related works:
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: https://EconPapers.repec.org/RePEc:pra:mprapa:8201
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().