The uniqueness of short-term collateralization

  • 0.35 MB
  • English
World Bank, Development Research Group, Finance , Washington, D.C
Commercial loans -- Econometric models., Lines of credit -- Econometric models., Security
About the Edition

A secured letter-of-credit loan allows a lender to make larger loans than would be permissible on an unsecured basis, maximizing a risky borrower"s investment capital. Empirical evidence shows that secured letters of credit are used by borrowers who are informationally opaque and have higher observable risk. Such borrowers also have fewer growth opportunities and are less likely to pay dividends.

Other titlesUniqueness of short term collateralization
StatementLeora Klapper.
SeriesPolicy research working paper ;, 2544, Policy research working papers (Online) ;, 2544.
ContributionsWorld Bank. Development Research Group. Finance.
LC ClassificationsHG3881.5.W57
The Physical Object
FormatElectronic resource
ID Numbers
Open LibraryOL3669255M
LC Control Number2002616084

The uniqueness of short-term collateralization (English) Abstract. The author finds evidence that lines of credit secured by accounts receivable are associated with business borrowers with a high risk of default.

While an unsecured short-term loan is repaid from the borrower's future cash flow, a loan secured by accounts Cited by: Get this from a library. The uniqueness of short-term collateralization. [Leora Klapper; World Bank. Development Research Group.

Description The uniqueness of short-term collateralization PDF

Finance.] -- A secured letter-of-credit loan allows a lender to make larger loans than would be permissible on an unsecured The uniqueness of short-term collateralization book, maximizing a risky borrower's investment capital. Empirical evidence shows that. Downloadable. The author finds evidence that lines of credit secured by accounts receivable are associated with business borrowers with a high risk of default.

While an unsecured short-term loan is repaid from the borrower's future cash flow, a loan secured by accounts receivable (a unique form of"inside"collateral) is repaid from previously generated and observed sales (the.

Collateral is a property or other asset that a borrower offers as a way for a lender to secure the loan. If the borrower stops making the promised loan payments, the lender can seize the Author: Julia Kagan.

Downloadable (with restrictions). Using confidential data on a large sample of relationship lending, we analyze the determining factors of the collateralization of business loans from banks, distinguishing between firms with observable risk and firms with hidden information.

We achieve three main results. First, we provide evidence that observably riskier borrowers are Cited by: 2.

Download The uniqueness of short-term collateralization PDF

Pets, pages. Voted "Best Cat Book" by the readers of Cat Fancy magazineCara's Breakfast, Jill Atkins,Breakfast, 31 pages. "Cara wanted an egg for her breakfast. But first she must get Hattie the hen to lay it!"--Cover The Uniqueness of Short-term Collateralization, Leora Klapper,Bank loans, 37 pages.

However, for book leverage, the impact of firm size, the market-to-book ratio, and the effect of inflation are not reliable. The empirical evidence seems reasonably consistent with some versions.

Part of the Understanding Complex Systems book series (UCS) This is a preview of subscription content, log in to check access. The uniqueness of short-term collateralization. Gallegati M. () Trade Credit Networks and Systemic Risk. In: Helbing D. (eds) Managing Complexity: Insights, Concepts, Applications.

Understanding Complex Cited by: 4. Leora F. Klapper's 76 research works with 6, citations reads, including: Toward Successful Development Policies: Insights from Research in Development Economics.

Details The uniqueness of short-term collateralization PDF

Collateral Value Insurance: A type of business insurance used by lenders to guarantee the value of appraised property.

Collateral value insurance also guarantees a minimum liquidation value in the Author: Jason Fernando. Introduction. As has been well documented by several recent studies (Berger et al., b, Menkhoff et al., ), collateralization is a widespread feature of the credit-acquisition practice of collateralization has been investigated across various countries (Berger and Udell,Berger and Udell,Berger et al., a, Harhoff and Körting,Cited by: 2.

Contents. Contents. Comparability is the challenge 1 About the standards 2 About this publication 4 A. An introduction to fair value measurement 6. Shelly has a business that requires her to take out a loan to finance short-term working capital needs since she extends credit repayment terms to her customers.

Her working capital needs vary over time depending on her customer orders. The best type of loan financing for this is a: Revolving loan-Term loan-Secured loan-None of these are correct. Collateral refers to assets or personal property that you use to secure a loan.

For example, you typically secure a mortgage by pledging your home as collateral. If you default on a loan secured with collateral, the lender can seize the collateral and sell it to repay the debt. Other examples of loans secured with collateral include car loans.

My view is that x-coll is fine until it isn't. Margaret clearly hasn't hit that point yet. To me, having your whole portfolio with one bank, all x-coll is particularly unwise - they pretty much own you and you are wedded to them and their whims (like random 1% rate hikes, for eg) with potentially very little room to move.

Corporate Financial Management Chapter 18 study guide by Mary_Calderon includes 18 questions covering vocabulary, terms and more. Quizlet flashcards, activities and games help you improve your grades. Collateralize To offer an asset as a surety that a debt will be repaid.

The asset may be kept by the lender until the debt is repaid, or the borrower may maintain possession with the proviso that the lender may take possession of the borrower defaults.

For example, one collateralizes a mortgage loan with the real estate one purchases with the loan. Which of the following is most like a short-term collateralized loan.

Certificate of deposit B. Repurchase agreement C. Bankers' acceptance D. Commercial paper Eurodollars are _____. Which of the following is used to back international sales of goods and services.

Which of the following is most like a short-term collateralized loan. Certificate of deposit hase agreement C. Banker's acceptance D. Commercial paper If you thought prices of stock would be rising over the next few months you may wish to _____ on the stock.

Collateral, a borrower’s pledge to a lender of something specific that is used to secure the repayment of a loan (see credit).The collateral is pledged when the loan contract is signed and serves as protection for the lender. If the borrower ends up not making the agreed-upon principal and interest payments on the loan because of insolvency or for some other reason—that is, if.

Transactions Below is a summary of recent transactions approved and/or closed over the past several years. Additional information and references can be provided upon request.

4/ – $, Purchase Commercial Property: The Client was seeking to acquire a commercial property to renovate and start their new business. We were able to secure an SBA 7A. • Other than long-term judgment, what short-term consequences of rebelliousness does Paul cite in this extended passage.

• According to this passage, why are not even “moral” and religious people exempted from God’s wide-spread judgment. • Paul says that man’s wickedness suppresses the truth (v. 18). What truth are people suppressing?File Size: KB.

Such transactions are effected through the money markets, generally on an uncollateralized basis for short-term transactions and on a collateralized basis for longer-term transactions.

Giga-fren. A portion of the morning auction has been offered on a collateralized basis since September For example if I wanted to make a hard money loan at a 65% LTV to a private investor at a high short term interest rate with the property secured as collateral.

I could present the promissory note to the lender and somehow negotiate a lower interest rate and keep the spread. ratio and short-term debt-to-equiy ratio.

However, it exerts strong negative relationship with long-term debt-to-equity ratio controlling for firm’s tangibility, nominal long-term interest rate, market-to-book ratio, size, and firm dummies.

Nonetheless, no conclusion is found regarding the. Secured auto loans use a collateral in order to reduce the cost of financing to the borrower and to reduce the risk of financing to the the whole, this exchange is mutually beneficial for lenders and borrowers.

However, it is only truly an option if you have collateral to use in order to secure the loan. Commercial paper Short-term promissory notes either unsecured or backed by assets such as loans or mortgages issued by a corporation.

The maturity of commercial paper is typically less than days; the most common maturity range is 30 to 50 days or less.

Commercial Paper An unsecured, short-term debt security issued by a corporation. Commercial paper. Carnegie-Rochester Conference Series on Public Policy 38 () North-Holland Deposit insurance reform: a functional approach* Robert C.

Mertonf Harvard University, Boston, MAU.S.A. and Zvi Bodie Boston University, Boston, MAU.S.A. Abstract The current system of deposit insurance has a basic structural problem because there is a mismatch Cited by: The book “is the performance of an intellectual virtuoso, brilliant, complex, perfectly controlled.”37 Ina retrospective analysis of the book appeared, entitled Schumpeter’s Vision: Capitalism, Socialism, and Democracy After 40 Years Here several of Schumpeter’s former students and associates joined with some European scholars.

13) Providing short-term loans to countries that are unable to meet their financial obligations is a primary function of the International Monetary Fund. 14) The World Bank is an agency of the U.S. federal government. 15) The North American Free Trade Agreement was formed by twelve North American countries.

the level of short-term rates” [ intuitively, from an overall financial lubrication angle (i.e., money+collateral), if collateral velocity has already been reduced from approx 3 to 2, there may.

eBook is an electronic version of a traditional print book THIS can be read by using a personal computer or by using an eBook reader.

(An eBook reader can be a software application for use on a computer such as Microsoft's free Reader application, or a book-sized computer THIS is used solely as a reading device such as Nuvomedia's Rocket eBook.The past twenty years have seen great theoretical and empirical advances in the field of corporate finance.

Whereas once the subject addressed mainly the financing of corporations--equity, debt, and valuation--today it also embraces crucial issues of governance, liquidity, risk management, relationships between banks and corporations, and the macroeconomic impact of corporations.