This paper develops a model where two lenders to subprime borrowers compete with the interest rates charged and the severity of loan covenants. The model has a stable equilibrium, which demonstrates how an increase in...This paper develops a model where two lenders to subprime borrowers compete with the interest rates charged and the severity of loan covenants. The model has a stable equilibrium, which demonstrates how an increase in the number of borrowers or an increase in the cost of meeting covenants will reduce the severity of the covenants required by lenders, and each of these changes will increase the difference in the severity of the loan covenant levels. An increase in the expected losses to the lender from relaxing covenants will increase the severity of loan covenants, and this will also make the levels of severity more dispersed. Additional analysis demonstrates how exogenous shifts affect the interest rates charged by the lenders and their profits展开更多
In the modem society where information is efficient, information exchange is an important affair and function of trade association. However, information exchange behaviors of industry association will have double and ...In the modem society where information is efficient, information exchange is an important affair and function of trade association. However, information exchange behaviors of industry association will have double and legal effect on market and competition, which can not only promote the communication among members of the industry to find a solution to the industry benefit maximization, but also can produce inhibition and barriers to competition in the market. So in this paper, the industry association analysis will be made on the pros and cons of the information exchange, and the legislative defects and the insufficiency of information exchange industry association in our country. According to the practice in our country, the author puts forward the system design of our country industry association information exchange behavior.展开更多
文摘This paper develops a model where two lenders to subprime borrowers compete with the interest rates charged and the severity of loan covenants. The model has a stable equilibrium, which demonstrates how an increase in the number of borrowers or an increase in the cost of meeting covenants will reduce the severity of the covenants required by lenders, and each of these changes will increase the difference in the severity of the loan covenant levels. An increase in the expected losses to the lender from relaxing covenants will increase the severity of loan covenants, and this will also make the levels of severity more dispersed. Additional analysis demonstrates how exogenous shifts affect the interest rates charged by the lenders and their profits
文摘In the modem society where information is efficient, information exchange is an important affair and function of trade association. However, information exchange behaviors of industry association will have double and legal effect on market and competition, which can not only promote the communication among members of the industry to find a solution to the industry benefit maximization, but also can produce inhibition and barriers to competition in the market. So in this paper, the industry association analysis will be made on the pros and cons of the information exchange, and the legislative defects and the insufficiency of information exchange industry association in our country. According to the practice in our country, the author puts forward the system design of our country industry association information exchange behavior.
