Journal Article
Credit rationing by loan size in commercial loan markets
Abstract: The authors present a theoretical model in which a profit-maximizing lender may ration credit to businesses by restricting loan size. Such credit rationing occurs despite the absence of differences across borrowers in default risk or loan administration costs. Moreover, the model predicts an interest rate-loan size pattern that matches that observed in U.S. commercial loan markets.
Keywords: Credit; Bank loans;
Access Documents
File(s): File format is application/pdf https://fraser.stlouisfed.org/files/docs/publications/frbrichreview/rev_frbrich199205.pdf
Authors
Bibliographic Information
Provider: Federal Reserve Bank of Richmond
Part of Series: Economic Review
Publication Date: 1992
Volume: 78
Issue: May
Pages: 3-8