The uniqueness of short-term collateralization
A secured letter-of-credit loan allows a lender to make larger loans than would be permissible on an unsecured basis, maximizing a risky borrower's investment capital. Empirical evidence shows that secured letters of credit are used by borrowers who are informationally opaque and have higher ob...
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Corporate Author: | |
Format: | eBook |
Language: | English |
Published: |
Washington, D.C
World Bank, Development Research Group, Finance
2001
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Series: | Policy research working paper
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Collection: | World Bank E-Library Archive - Collection details see MPG.ReNa |
Summary: | A secured letter-of-credit loan allows a lender to make larger loans than would be permissible on an unsecured basis, maximizing a risky borrower's investment capital. Empirical evidence shows that secured letters of credit are used by borrowers who are informationally opaque and have higher observable risk. Such borrowers also have fewer growth opportunities and are less likely to pay dividends |
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Item Description: | "February 2001"--Cover. - Includes bibliographical references (p. 32-33). - Title from title screen as viewed on Sept. 18, 2002 |