The Equilibrium Effects of Information Deletion: Evidence from Consumer Credit Markets

Who Defaults in Subprime Consumer Credit Markets?

SSRN Electronic Journal ◽

10.2139/ssrn.2078800 ◽

2012 ◽

Author(s):

Sule Alan ◽

Thomas F. Crossley

Keyword(s):

Credit Markets ◽

Consumer Credit

Financial Crises and the Transmission of Monetary Policy to Consumer Credit Markets

SSRN Electronic Journal ◽

10.2139/ssrn.2705008 ◽

2020 ◽

Author(s):

Sasha Indarte

Keyword(s):

Monetary Policy ◽

Financial Crises ◽

Credit Markets ◽

Consumer Credit ◽

Transmission Of Monetary Policy

The Effects of Competition in Consumer Credit Markets

SSRN Electronic Journal ◽

10.2139/ssrn.3170996 ◽

2018 ◽

Cited By ~ 2

Author(s):

Stefan Gissler ◽

Rodney Ramcharan ◽

Edison Yu

Keyword(s):

Credit Markets ◽

Consumer Credit

Consumer Credit Markets in the United States and Europe

The Economics of Consumer Credit ◽

10.7551/mitpress/2607.003.0003 ◽

2006 ◽

Cited By ~ 5

Keyword(s):

United States ◽

Credit Markets ◽

Consumer Credit ◽

The United States

The Effects of Competition in Consumer Credit Markets

Review of Financial Studies ◽

10.1093/rfs/hhaa035 ◽

2020 ◽

Vol 33 (11) ◽

pp. 5378-5415

Author(s):

Stefan Gissler ◽

Rodney Ramcharan ◽

Edison Yu

Keyword(s):

Credit Risk ◽

Credit Markets ◽

Consumer Credit ◽

Extensive Margin ◽

Credit Policy ◽

Default Rates

Abstract This paper finds that banks and nonbanks respond differently to increased competition in consumer credit markets. Increased competition and a greater threat of failure induces banks to specialize in relationship business lending, and surviving banks are more profitable. However, nonbanks change their credit policy when faced with more competition and expand credit to riskier borrowers at the extensive margin, resulting in higher default rates. These results show how the effects of competition depend on the form of intermediation. They also suggest that increased competition can cause credit risk to migrate outside the traditional supervisory umbrella.

Information Asymmetries in Consumer Credit Markets: Evidence from Payday Lending

American Economic Journal Applied Economics ◽

10.1257/app.5.4.256 ◽

2013 ◽

Vol 5 (4) ◽

pp. 256-282 ◽

Cited By ~ 26

Author(s):

Will Dobbie ◽

Paige Marta Skiba

Keyword(s):

Moral Hazard ◽

Adverse Selection ◽

Regression Discontinuity ◽

Credit Markets ◽

Consumer Credit ◽

Probability Of Default ◽

Information Asymmetries ◽

Payday Lending ◽

Loan Market ◽

Payday Loans

Information asymmetries are prominent in theory but difficult to estimate. This paper exploits discontinuities in loan eligibility to test for moral hazard and adverse selection in the payday loan market. Regression discontinuity and regression kink approaches suggest that payday borrowers are less likely to default on larger loans. A $50 larger payday loan leads to a 17 to 33 percent drop in the probability of default. Conversely, there is economically and statistically significant adverse selection into larger payday loans when loan eligibility is held constant. Payday borrowers who choose a $50 larger loan are 16 to 47 percent more likely to default. (JEL D14, D82, G21)