Asymmetric Information and the Market Structure of the Banking Industry

Asymmetric Information and the Market Structure of the Banking Industry
Author: Mr.Giovanni Dell'Ariccia
Publisher: International Monetary Fund
Total Pages: 32
Release: 1998-06-01
Genre: Business & Economics
ISBN: 145195154X

The paper analyzes the effects of informational asymmetries on the market structure of the banking industry in a multi-period model of spatial competition. All lenders face uncertainty with regard to borrowers’ creditworthiness, but, in the process of lending, incumbent banks gather proprietary information about their clients, acquiring an advantage over potential entrants. These informational asymmetries are an important determinant of the industry structure and may represent a barrier to entry for new banks. The paper shows that, in contrast with traditional models of horizontal differentiation, the steady-state equilibrium is characterized by a finite number of banks even in the absence of fixed costs.

Moral Hazard in Health Insurance

Moral Hazard in Health Insurance
Author: Amy Finkelstein
Publisher: Columbia University Press
Total Pages: 161
Release: 2014-12-02
Genre: Medical
ISBN: 0231538685

Addressing the challenge of covering heath care expenses—while minimizing economic risks. Moral hazard—the tendency to change behavior when the cost of that behavior will be borne by others—is a particularly tricky question when considering health care. Kenneth J. Arrow’s seminal 1963 paper on this topic (included in this volume) was one of the first to explore the implication of moral hazard for health care, and Amy Finkelstein—recognized as one of the world’s foremost experts on the topic—here examines this issue in the context of contemporary American health care policy. Drawing on research from both the original RAND Health Insurance Experiment and her own research, including a 2008 Health Insurance Experiment in Oregon, Finkelstein presents compelling evidence that health insurance does indeed affect medical spending and encourages policy solutions that acknowledge and account for this. The volume also features commentaries and insights from other renowned economists, including an introduction by Joseph P. Newhouse that provides context for the discussion, a commentary from Jonathan Gruber that considers provider-side moral hazard, and reflections from Joseph E. Stiglitz and Kenneth J. Arrow. “Reads like a fireside chat among a group of distinguished, articulate health economists.” —Choice

Complex Mortgages (CM)

Complex Mortgages (CM)
Author: Gene Amromin
Publisher: DIANE Publishing
Total Pages: 57
Release: 2011
Genre: Business & Economics
ISBN: 1437987850

CM became a popular borrowing instrument during the bullish housing market of the early 2000s but vanished rapidly during the subsequent downturn. These non-traditional loans (interest only, negative amortization, and teaser mortgages) enable households to postpone loan repayment compared to traditional mortgages and hence relax borrowing constraints. But, they increase household leverage and heighten dependence on mortgage refinancing. CM were chosen by prime borrowers with high income levels seeking to purchase expensive houses relative to their incomes. Borrowers with CM experience substantially higher ex post default rates than borrowers with traditional mortgages with similar characteristics. Illus. This is a print on demand report.

Essays on Consumer Credit Markets

Essays on Consumer Credit Markets
Author: Mark William Jenkins
Publisher: Stanford University
Total Pages: 135
Release: 2009
Genre:
ISBN:

This dissertation studies the organization of consumer credit markets using a rich and novel dataset from a large subprime auto lender. Its primary goal is to develop empirical methods for analyzing markets with asymmetric information and to use these methods to better understand the behavior of subprime borrowers and lenders. The first chapter quantifies the importance of adverse selection and moral hazard in the subprime auto loan market and shows how different loan contract terms serve to mitigate these distinct information problems. The second chapter examines the impact of centralized credit scoring on lending outcomes, including the distribution of performance across dealerships within the firm. The third chapter studies borrower repayment behavior and quantifies the impact of ex post moral hazard on interest rates and the costs of default. Collectively, the three chapters provide a better understanding of the functioning of markets for subprime credit in the U.S. They also provide unique empirical evidence on the importance of asymmetric information and the value of screening, monitoring, and contract design in consumer credit markets in general.

Readings in the Theory of Economic Development

Readings in the Theory of Economic Development
Author: Dilip Mookherjee
Publisher: Wiley-Blackwell
Total Pages: 496
Release: 2001-02-08
Genre: Business & Economics
ISBN: 9780631220053

This collection provides a complete introduction to new ways of thinking about economic development. Emphasizing economic theory, each article has been selected for its theoretical completeness, accessibility and clarity as well as its value as a contribution to the field. A thorough introductory essay summarizes the state of the field for those new to the field and explains the importance of the articles selected.

New Challenges for the Banking Industry

New Challenges for the Banking Industry
Author: Santiago Carbó-Valverde
Publisher: Springer Nature
Total Pages: 351
Release: 2023-07-18
Genre: Business & Economics
ISBN: 3031329317

This book aims to enrich the banking and finance literature by gathering insights in new research topics being undertaken in the aftermath of the Covid-19 pandemic. The book spans all the major research fields in finance and banking with a particular focus on corporate governance, sustainability and innovation. The book brings together academics at a range of European universities and stems from research presented at the 2022 Annual Conference of the Wolpertinger Club. The first part focuses on the impact of banks’ corporate governance practice on their performance, including pay gaps as well as diversity and ESG policies. The second part examines how banks are conducting their green transition with topics including reputational risk, greenwashing, green bonds, and ESG scores. The final section of the book considers the role of digitalization and innovative technologies in creating unprecedented disruption in the banking sector. This edited collection is valuable to those researching in finance, banking and business, as well as policymakers and operational decision makers at financial institutions.

The Cambridge Handbook of Consumer Privacy

The Cambridge Handbook of Consumer Privacy
Author: Evan Selinger
Publisher: Cambridge University Press
Total Pages: 616
Release: 2018-04-02
Genre: Law
ISBN: 1316859274

Businesses are rushing to collect personal data to fuel surging demand. Data enthusiasts claim personal information that's obtained from the commercial internet, including mobile platforms, social networks, cloud computing, and connected devices, will unlock path-breaking innovation, including advanced data security. By contrast, regulators and activists contend that corporate data practices too often disempower consumers by creating privacy harms and related problems. As the Internet of Things matures and facial recognition, predictive analytics, big data, and wearable tracking grow in power, scale, and scope, a controversial ecosystem will exacerbate the acrimony over commercial data capture and analysis. The only productive way forward is to get a grip on the key problems right now and change the conversation. That's exactly what Jules Polonetsky, Omer Tene, and Evan Selinger do. They bring together diverse views from leading academics, business leaders, and policymakers to discuss the opportunities and challenges of the new data economy.

A New Database on Financial Development and Structure

A New Database on Financial Development and Structure
Author: Thorsten Beck
Publisher: World Bank Publications
Total Pages: 67
Release: 1999
Genre: Banca central
ISBN:

This new database of indicators of financial development and structure across countries and over time unites a range of indicators that measure the size, activity, and efficiency of financial intermediaries and markets.

The Oxford Handbook of Entrepreneurial Finance

The Oxford Handbook of Entrepreneurial Finance
Author: Douglas Cumming
Publisher: OUP USA
Total Pages: 937
Release: 2012-03-22
Genre: Business & Economics
ISBN: 0195391241

Provides a comprehensive picture of issues dealing with different sources of entrepreneurial finance and different issues with financing entrepreneurs. The Handbook comprises contributions from 48 authors based in 12 different countries.