dc.contributor |
Universitat Pompeu Fabra. Departament d'Economia i Empresa |
dc.contributor.author |
Eslava, Marcela |
dc.contributor.author |
Freixas, Xavier |
dc.date |
2016-01-01 |
dc.identifier.citation |
https://econ-papers.upf.edu/ca/paper.php?id=1510 |
dc.identifier.uri |
http://hdl.handle.net/10230/26828 |
dc.format |
application/pdf |
dc.language.iso |
eng |
dc.relation |
Economics and Business Working Papers Series; 1510 |
dc.rights |
L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons |
dc.rights |
info:eu-repo/semantics/openAccess |
dc.rights |
http://creativecommons.org/licenses/by-nc-nd/3.0/es/ |
dc.subject |
public development banks; governmental loans and guarantees; costly screening; credit rationing. |
dc.subject |
Finance and Accounting |
dc.title |
Public development banks and credit market imperfections |
dc.type |
info:eu-repo/semantics/workingPaper |
dc.description.abstract |
This paper is devoted to understanding the role of public developmentbanks in alleviating financial market imperfections. We explore two issues:1) which types of firms should be optimally targeted by public financialsupport; and 2) what type of mechanism should be implemented in orderto efficiently support the targeted firms access to credit. We modelfirms that face moral hazard and banks that have a costly screening technology,which results in a limited access to credit for some firms. Weshow that a public development bank may alleviate the inefficiencies bylending to commercial banks at subsidized rates, targeting the firms thatgenerate high added value. This may be implemented through subsidizedear-marked lending to the banks or through credit guarantees which weshow to be equivalent in "normal times". Still, when banks are facing aliquidity shortage, lending is preferred, while when banks are undercapitalized,a credit guarantees program is best suited. This will imply that1) there is no "one size fits all" intervention program and 2) that anyintervention program should be fine-tuned to accommodate the characteristicsof competition, collateral, liquidity and banks capitalization ofeach industry. |