Series: IMF Working Papers
Author(s): International Monetary Fund
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 July 2008
Keywords: credit screening, loan quality, signaling games, incentive compatibility, probability, banking, equation, banking system, banks ? loan,
The volume of credit extended by a bank can be an informative signal of its abilities in loan selection and management. It is shown that, under asymmetric information, banks may therefore rationally lend more than...