.png){kind=icon}
.png){kind=icon}
Return
Intermediation Variety
.png){kind=icon}
PRE
AI
DOI：10.1111/jofi.13084.png)
.png){kind=icon}
Original request for help.png){kind=icon}
Share.png){kind=icon}
Save
Abstract
En 中文
We explain why banks and nonbank intermediaries coexist in a model based only on differences in their funding costs. Banks enjoy a low cost of capital due to safety nets and money-like liabilities. We show that this can actually be a disadvantage: it generates a soft-budget-constraint problem that makes it difficult for banks to credibly threaten to withhold additional funding to failed projects. Nonbanks emerge to solve this problem. Their high cost of capital is an advantage: it allows them to commit to terminate funding. Still, nonbanks never take over the entire market, but other coexist with banks in equilibrium.
Keywords:
PRIVATE EQUITY
MORAL HAZARD
RISK-TAKING
LENDING RELATIONSHIPS
CAPITAL REQUIREMENTS
MARKET EQUILIBRIUM
BANK DEBT
CREDIT
COMPETITION
INFORMATION
AI Summary
Key information extracted from the uploaded paper, including a brief overview, abstract, background, key highlights, visual analysis, and future outlook.
Journal
IF:
9.5
Papers:
4.0K
Citations:
5.0W