Cover IMF Working Papers
Wholesale Bank Funding, Capital Requirements and Credit Rationing
Author: Mr. Itai Agurhttps://orcid.org/0000-0002-6150-737X
Series:
IMF Working Papers
Volume/Issue:
Volume 2013: Issue 030
Language:
English
Publication Date:
31 Jan 2013
DOI:
https://doi.org/10.5089/9781475571622.001
ISBN:
9781475571622
ISSN:
1018-5941
Pages:
22
Keywords:
WP; credit rationing; financial crisis
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper analyzes how different types of bank funding affect the extent to which banks ration credit to borrowers, and the impact that capital requirements have on that rationing. Using an extension of the standard Stiglitz-Weiss model of credit rationing, unsecured wholesale finance is shown to amplify the credit market impact of capital requirements as compared to funding by retail depositors. Unsecured finance surged in the pre-crisis years, but is increasingly replaced by secured funding. The collateralization of wholesale funding is found to expand the extent of credit rationing.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund