WORKING PAPER NO. 05-18 A QUANTITATIVE THEORY OF UNSECURED CONSUMER CREDIT WITH RISK OF DEFAULT
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The so called portfolio approach to credit supply (for an overview see Fase (1995))
starts with the assumption that banks maximize a utility function under a set of balance sheet
constraints which allows to derive directly credit supply functions. However, the derivation
assumes a perfect financial market while treating the private sector (comprising the corporate
and household sectors) as one homogeneous entity. These limitations restrict the use of this
model when trying to address the specific issues related to corporate finance in imperfect
markets.
The demand for any type of credit – including firm’s demand for commercial bank
credit...
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WORKING PAPER NO. 05-18 A QUANTITATIVE THEORY OF UNSECURED CONSUMER CREDIT WITH RISK OF DEFAULT
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WORKING PAPER NO. 05-18 A QUANTITATIVE THEORY OF UNSECURED CONSUMER CREDIT WITH RISK OF DEFAULT
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