Dollars Dollars Everywhere, nor Any Dime to Lend : Credit Limit Constraints on Financial Sector Absorptive Capacity

• Tác giả: Asim Ijaz Khwaja
• Ngôn ngữ: eng
• Ký hiệu phân loại: 220.83 Bible
• Thông tin xuất bản: 2012
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 320831
• Chủ đề: 1. Banks; 2. Capacity E220; 3. Capital; 4. Financial Markets and the Macroeconomy E440; 5. Investment

Tóm tắt

We exploit an unexpected inflow of liquidity in an emerging market to study how capital is intermediated to firms. We find that backward-looking credit limit constraints imposed by banks make it difficult for firms to borrow, despite readily available bank liquidity, healthy aggregate demand, and a sharply falling cost of capital. The resulting aggregate failure to extend and retain capital in the economy suggests that agency costs that force banks to rely on sticky balance-sheet-based credit limits prevent emerging economies from effectively intermediating capital.