Bank Revolving Credit as a Channel of Monetary Policy Targeting Interest Rates

This paper investigates the implication of bank revolving credit in the form of credit card loans as a channel of monetary policy targeting the federal funds rate since 1980. Credit cards have become increasingly popular and a necessity for many transactions and purchases in the United States. The revolving credit nature of credit card loans makes them an instant tool for consumer loans that can facilitate consumption. Using instrumental variable and two-stage least squares (2SLS) methodology, we analyze the implication of credit card loans to modern monetary policy that targets interest rates.

The Effects of the COVID-19 Shutdown on the Consumer Credit Card Market: Revolvers versus Transactors

The consumer credit card market has experienced dramatic, unprecedented changes in the wake of the COVID-19 shutdown of the U.S. economy. Revolving credit in the G.19 Consumer Credit statistical release fell by an annualized rate of 32 percent in the second quarter of 2020.

UNSECURED CREDIT, PRODUCT VARIETY, AND UNEMPLOYMENT DYNAMICS

Revolving credit is the prime determinant of short-run household liquidity and comoves positively with product variety and negatively with unemployment. I develop a theory of feedback between revolving credit and product development and examine its ability to explain labor market volatility. Extending the Mortensen–Pissarides model with an endogenous borrowing constraint and free entry of monopolistically competitive firms reproduces stylized facts in the data and amplifies both productivity and financial shocks through mutual causality. Higher debt limits encourage firm entry and raise product variety (the entry channel), and greater variety makes default more costly and thereby raises the equilibrium debt level (the consumption value channel). Though productivity shocks are sufficient to generate higher volatility, financial shocks are essential in approximating the time series patterns of unemployment, vacancies, and revolving credit in the data, and reproduce the rise in unemployment during the Great Recession.

Short-Term Funding and Financing Alternatives

This chapter discusses the different types of short-term funding and financing alternatives that are available in the commercial money and capital markets. First, it covers commercial paper market activity, issue maturity, and quality. Second, the chapter addresses common uses and terms for commercial and standby letters of credit as well as common issuing requirements and covenants, and discusses the parties, processes, and risks involved. Third, it covers bilateral and trilateral repurchase agreements. Fourth, the chapter discusses asset-based loans, including accounts receivable factoring and purchase order financing. Finally, it covers revolving credit facilities and their associated costs. In sum, short-term funding is important for borrowers seeking additional liquidity to finance working capital or other short-term investments. For each type of short-term funding alternative, the chapter discusses the expected return and potential risks that the borrower and lender should evaluate before entering the financial transaction.

Financial Instruments to Support Russian Exporters

The subject of the research is the basic financial instruments for the support of Russian exporters that can ensure the competitiveness of Russian corporations in the international markets. The purpose of the article is a structured description of the line of banking products that are available for leading Russian exporters, as well as defining the tools for international development banks whose member is the Russian Federation; also, commercial banks products classification for exporters, and study of pre-export credit. The methodological base for the research is optimization approach application to the forming of the capital structure for the exporting corporation using financial tools. To analyze banking products, structural and process approaches, including describing the parameters and pre-export and post export financing mechanisms and detailed execution schedule of the transactions, are used. Three key elements of corporate capital raising are discriminated. They are optimal structuring of the deal, correct organization of the monetary fund’s raising process, and efficient risk management in raising debt and stock capital. It is concluded that exporters have to use a number of different banking products to raise capital for achieving tactical and strategic aims of development. Depending on the needed size, terms and structure of the transactions the corporation can use such tools as short-term revolving credit, medium-term investment credit, long-term project financing.

PROSPEK GAGAL SUKSES PINJAMAN UMKM MELALUI PEER-TO-PEER LENDING PADA LENDINGCLUB

Peer-to-peer lending as an innovation of financial services is a genuine opportunity for SMEs who are experiencing difficulties in accessing loans to formal financial institutions. The asymmetric information issue on peer-to-peer lending activity can lead to a credit risk that may cause a default loan. This research is a kind of associative research with the form of causal relationship. the purpose of this study is to determine the factors that influence the success of SMEs loans on Peer to peer lending activities. Samples obtained from the LendingClub platform using purposive sampling method. Analysis In this study using logistic regression analysis. Based on logistic regression analysis, it is found that loan amount, loan term, debt-to- income ratio, delinquency in last 2 year, inquiries in the last 6 month, and revolving credit utilization have a significant negative effect on the success of the loan. while annual income is not significant effect on the success of the loan.