학술저널
Financial Liberalization, Competition, and Bank Loan Quality
Financial Liberalization, Competition, and Bank Loan Quality
- 세종대학교 경제통합연구소
- Journal of Economic Integration
- 제20권 제1호
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2005.03109 - 122 (14 pages)
- 0
The paper studies the relationship between financial liberalization, characterized by removing entry restrictions, and bank loan quality. It shows that if a banking market is liberalized, the opportunity cost of screening loan applicants is driven lower by competition. Thus, a bank facing an entry threat is more likely to invest in screening instead of relying on collateral requirements. Removing entry restrictions may improve loan quality stability and reduce correlation between bank performance and asset price fluctuations.
Ⅰ. Introduction
Ⅱ. The Monopoly Case
Ⅲ. The Case with an Entrant
Ⅳ. Final Remarks
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