How the collateral requirements influencedthe bank’s lending rate
碩士 === 佛光人文社會學院 === 經濟學系 === 94 === This paper introduced the well-known model of spatial competition to banking proposed by Salop (1979) as the main framework, and extended the study of Hyytinen (2003). We used a simple two stage Game Theory showing how the bank’s lending rate influenced by the bo...
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| Format: | Others |
| Language: | zh-TW |
| Published: |
2006
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| Online Access: | http://ndltd.ncl.edu.tw/handle/25408964820434909513 |
| Summary: | 碩士 === 佛光人文社會學院 === 經濟學系 === 94 === This paper introduced the well-known model of spatial competition to banking proposed by Salop (1979) as the main framework, and extended the study of Hyytinen (2003). We used a simple two stage Game Theory showing how the bank’s lending rate influenced by the borrower’s optimism and collateral requirements when there existing a belief asymmetry between borrowers and lenders and the loan contract consists of collateral requirements. We also analyzed the difference of lending rate between real asset pledged loan and priced loan guarantee provided by a third party.
The goal of this paper was to focus on the impact of asymmetric belief and collateral to the lending rate decision of banks. We demonstrated that in a symmetric Nash equilibrium with belief asymmetry and fixed number of banks on the market: (1)The lending rate is decreasing in the degree of borrower optimism on the project, and decreasing in the level of collateral requirements; (2)The lending rate of secured loan is higher than that of unsecured loan, and the lending rate of real asset pledged loan is higher than the priced loan guarantee provided by a third party when there is the same level of collateral requirements in the loan contract.
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