Types Of Borrowers Research Articles

Коммерческое ипотечное кредитование: вопросы стандартизации

The article states that a loan secured by commercial property (commercial mortgages), as one of the most popular types of corporate loans has a number of advantages compared to other types of borrowing: the borrower is able to quickly get the necessary amount of money for any need - business expansion, working capital, ability to Finance large deals, and the disposal 
 of banks remains liquid assets, quick sale which will cover damages in case of default by the cus-tomer of the terms of the loan. It is confirmed that the product is characterized by specific risks, 
 often resulting in refusal of credit or their manifestations in the course of servicing the debt: unac-ceptable for the lender level of capitalization and liquidity of the collateral, the degree of occupan-cy of commercial real estate and the level of indexing of interest rates on leases; rental impropriety of the object for commercial use; encumbrances accept collateral in other liabilities etc. It is noted that one of the ways to improve the process of commercial mortgage lending in order to reduce transaction risks is its standardization. In the Russian Federation, the Association of Russian Banks is developing banking standards, which to date has approved more than fifteen standards (most 
 of them are banking business process quality standards and methodological documents). It is pro-posed to develop a Standard for the lending process secured by commercial real estate; a matrix 
 of requirements for the components of this process is provided, reflecting the best practices of leading Russian banks working in the field of commercial mortgages. In using the Standard, stakeholders are both credit institutions and borrowers.

Relationship lending: A source of support or a means of exploitation?

Using a dataset from the State Bank of Pakistan containing each and every commercial loan generated in the economy from 2006 to 2013, we find that, on average, a longer relationship length is associated with lower risk premiums but higher collateral requirements. However, further examination paints a far more complex picture. The impact of relationship length on risk premiums and collateral varies substantially with the type of lender, as well as the type of borrower. We argue that conflicting empirical findings on relationship lending are the result of using datasets limited to certain types of borrowers or financial institutions.

The COVID-19 Shock and Consumer Credit: Evidence from Credit Card Data

We use credit card data from the Federal Reserve Board's FR Y-14M reports to study the impact of the COVID-19 shock on the use and availability of consumer credit across borrower types from March through August 2020. We document an initial sharp decrease in credit card transactions and outstanding balances in March and April. While spending starts to recover by May, especially for risky borrowers, balances remain depressed overall. We find a strong negative impact of local pandemic severity on credit use, which becomes smaller over time, consistent with pandemic fatigue. Restrictive public health interventions also negatively affect credit use, but the pandemic itself is the main driver. We further document a large reduction in credit card originations, especially to risky borrowers. Consistent with a tightening of credit supply and a flight-to-safety response of banks, we find an increase in interest rates of newly issued credit cards to less creditworthy borrowers.

Liquidity Insurance with Market Information

Abstract This paper studies how market signals—such as stock prices—can help alleviate the severity of the asymmetric information problem in credit and liquidity management. Asymmetric information hinders the ability of borrowers (firms, investment banks, etc.) to undertake profitable investment opportunities and to insure themselves against liquidity shocks. I show that on the equilibrium path creditors do not learn anything from market signals because they can use a menu of contracts to screen the different types of borrowers. However, by conditioning liquidity insurance on ex post price signals, creditors are able to provide the borrowers with better incentives for truth telling. At the same time, prices depend on the liquidity that creditors offer to the borrowers. This two-way feedback impacts the design of the optimal contract and potentially generates multiple equilibria in financial markets.

Analyzing credit risk among Chinese P2P-lending businesses by integrating text-related soft information

Abstract Text-related soft information effectively alleviates the information asymmetry associated with P2P lending and reduces credit risk. Most existing studies use nonsemantic text information to construct credit evaluation models and predict the borrower's level of risk. However, the semantic information also reflect the ability and willingness of borrowers to repay and might be able to explain borrowers’ credit statuses. This paper examines whether semantic loan description text information helps predict the credit risk of different types of borrowers using a Chinese P2P platform. We use the 5P credit evaluation theory and the word embedding model to extract the semantic features of loan descriptions across five dimensions. Then, the AdaBoost ensemble learning strategy is applied to construct a credit evaluation model to improve the learning performance of an intelligent algorithm. The extracted semantic features are integrated into the evaluation model to study their explanatory ability with regard to the credit status of different types of borrowers. We conducted empirical research on the Renrendai P2P platform. Our conclusions show that the semantic features of textual soft information significantly improve the predictability of credit evaluation models and that the promotion effect is most significant for first-time borrowers. This paper has important practical significance for P2P platforms and the credit risk management of lenders. Furthermore, it has theoretical value for research concerning heterogeneous information-based credit risk analysis methods in big data environments.

The Role of Government and Private Institutions in Credit Cycles in the U.S. Mortgage Market

We show that the distribution of combined loan-to-value ratios (CLTVs) for purchase mortgages in the U.S. has been remarkably stable over the last 25 years. But there was a dramatic shift during the housing boom of the 2000s in the provision of high- CLTV loans through private sources, which replaced almost one-for-one the share of high-CLTV loans directly guaranteed by the government, via FHA and VA. Post 2008, FHA/VA loans increased back to 30% of all purchase mortgages. This substitution between government and privately backed high-CLTV loans holds within ZIP codes, properties and borrower types over the full sample period. We also show that the increase in private high-CLTV lending follows local house price increases rather than preceding them. These findings suggest that the housing boom was not accompanied by a shift towards more high-CLTV loans, and instead favor models that rely on changes in collateral values or broad changes in house price expectations.

Nonbanks, Banks, and Monetary Policy: U.S. Loan-Level Evidence since the 1990s

We analyze the effects of monetary policy on nonbank and bank credit supply to firms and households, in particular the associated real effects and the distribution of risk. For identification, we use exhaustive loan-level data since the 1990s and Gertler-Karadi (2015) monetary policy shocks. First, different from the literature showing that low monetary policy rates increase risk-taking in bank loans, we find that higher monetary policy rates lead to an expansion of credit supply and more risk-taking by nonbank lenders. During monetary contractions, credit supply for corporates, mortgages, and consumers shifts from regulated banks to less regulated, more fragile nonbanks. Moreover, this shift is more pronounced for ex-ante riskier borrowers. Second, nonbanks reduce the effectiveness of the bank lending channel of monetary policy at the loan-level. However, this reduction varies substantially by borrower type. Total credit and real effects are largely neutralized in consumer loans and the associated consumption, but not in corporate loans and investment.

Adverse Selection and Credit Certificates: Evidence from a P2P Platform

Certificates are widely used as a signaling mechanism to mitigate adverse selection when information is asymmetric. To reduce information asymmetry between lenders and borrowers, Chinese peer-to-peer (P2P) lending platforms encourage borrowers to obtain various kinds of credit certificates. As P2P markets continue to develop, it is plausible that certification may play a pivotal role in ensuring investment efficiency. We perform the first empirical investigation of this issue, using unique data from Renrendai, one of the People’s Republic of China’s largest P2P lending platforms. We find that surprisingly, loans with more credit certificates experience a higher rate of delinquency and default. However, lenders remain attracted by higher certificates despite lower loan performance ex post, which results in distorted capital allocation and reduced investment inefficiency. Overall, we document a setting where credit certificates fail to serve as an accurate signal due to their costless nature, where poor-quality borrowers use more certificates to boost their credit profiles and improve their funding success. Possible explanations for this phenomenon include differences in marginal benefit of certificates for different borrower types, bounded rationality, cognitive simplification, and borrower myopia.

Cost efficiency and financial situation of local governments in the Canary Isles during the recession

This paper examines cost efficiency in the Spanish municipal public sector, in a specific geographic area (the Canary Isles, Spain), with respect to financial condition and different types of municipal debt. The study focuses on municipalities dependent on tourism and on the consequences to them of the Great Recession, doing so via a two-stage analysis. In the first, the order-m method is used to evaluate the cost efficiency of 77 Canary Isles municipalities, for the period 2008-12. In the second stage, we examine the effect produced on cost efficiency by different types of borrowing (long term, short term, financial and commercial) together with other financial, economic, political and quality variables, using the model developed by Simar and Wilson (2007), based on a truncated bootstrap regression with panel data. Empirical analysis shows that in times of crisis there is a significant relationship between the components of financial condition and cost efficiency. In conclusion, municipal cost efficiency increases with commercial debt, but decreases with financial debt. Furthermore, certain socioeconomic variables affect the levels of cost efficiency. Este trabajo examina la eficiencia de costes para el caso particular del sector público municipal español, concretamente, para el caso de los municipios canarios, poniendo especial énfasis en áreas relacionadas con la condición financiera y diferentes tipologías de deuda, teniendo en cuenta las características propias que estos municipios poseen, como un índice turístico elevado. En primer lugar, se utiliza el método de orden m para evaluar la eficiencia de costes de 77 municipios de las Islas Canarias, para el período 2008-12. En la segunda etapa, examinamos el efecto producido en la eficiencia de costes por diferentes tipologías de endeudamiento (largo plazo, corto plazo, financiero y comercial) junto con otras variables financieras, económicas, políticas y de calidad, utilizando el modelo desarrollado por Simar y Wilson (2007), basado en una regresión truncada con datos de panel. Nuestro análisis empírico muestra que en tiempos de crisis existe una relación significativa entre los componentes de la condición financiera y la eficiencia de costes. En particular, concluye que mientras la eficiencia de los costes municipales aumenta con la deuda comercial, disminuye con la deuda financiera. Además, mostramos que ciertas variables socioeconómicas afectan los niveles de eficiencia de costes.

Financial and Legal Prospects for the Use of Government Bond Loans in Modern Conditions

The purpose of the study is to identify positive aspects of expanding the use of government bond loans. The paper also focuses on theoretical concepts of the ratio of taxes and loans, analyzing the advantages and disadvantages of government bond loans to determine their impact on the decisions of the issuer and the investor. Consideration of foreign experience in the use of bond loans allows identifying common features and aspects to improve the legal regulation of this institution in Russia science and practice.
 The results of the research consist of summarizing the studied material and describing the prospects for the development and use of government loans as a tool of financial and legal policy. The experience of foreign countries proves that it is possible to determine the legal nature of a government bond loan through the prism of regulating a new institution – the issue obligation.
 Conclusion: it is advisable to adopt a normative legal act that would systematize the form of government debt, contain general rules for the use of certain types of borrowing and mechanisms for servicing and repayment of debt, and provide other guarantees, principles of compensation, ways to restructure debt obligations, as well as a mechanism for interaction of public authorities in this area with clear regulation of the powers of public authorities and sanctions for late performance or non-performance by the issuer of its obligations.

A little skin in the game: Reducing moral hazard in joint liability lending through a mandatory collateral requirement

While joint liability group lending has been shown to resolve information problems in rural credit markets, the mutual insurance against default provided by such contracts is subject to moral hazard, resulting in the well-known free-riding problem. As with standard insurance, one solution to this problem is the imposition of a deductible, which under a joint liability contract amounts to an individual collateral requirement. Conceptually, such a hybrid contract should reduce morally hazardous behavior but have an ambiguous impact on credit market participation, as the collateral requirement would simultaneously crowd in and ration out different types of borrowers. In order to empirically test these effects, we employ a framed field experiment with credit group members in Tanzania. Our results show that the imposition of a modest (20%) individual collateral requirement in a joint liability group significantly increases effort supplied to the loan-financed project by 5% while reducing credit market participation by 7 percentage points. This amounts to an overall reduction in loan defaults of approximately 20%. Although we conceptually would expect the effect of the individual collateral requirement to vary by risk aversion and social connectedness, we find no such heterogeneous impacts in the data.

Quantifying the Value of Heterogeneous Preference: An Empirical Matching Model of Peer-to-Peer Lending

This paper focuses on an essential, but previously underexplored, mechanism that underlies the operation of peer-to-peer (P2P) lending markets: lender-borrower matching. We model the formation of lender-borrower matches as an endogenous matching process in which agents strategically choose their partners based on their preferences. Using data from a large online lending site, we empirically investigate the determinants of lender-borrower matching and explore their importance. Our structural estimates suggest that heterogeneous preference leads to various matching patterns across different types of lenders and borrowers. Experienced, hasty, and male lenders exhibit more tolerance toward borrowers with a lower credit score than do their counterparts. Based on these estimates, we perform counterfactual analyses to quantify the economic value of P2P lending. Note that P2P lending differs from traditional lending by following a decentralized matching process under which heterogeneous preference is maintained. We quantify the matching value from the decentralized matching process in P2P lending and compare it to that of its centralized counterpart for which heterogeneous preference is not respected. We find that P2P lending gains value from heterogeneous preference and that a more centralized matching process hurts large and active markets less than for small and inactive markets. Further, an agent-level analysis shows that more experienced lenders and low credit score borrowers are more vulnerable to a credit-score-ruled centralized matching process. Our findings offer managerial implications for credit scoring and information disclosure policy.

Word Formation of Photography Terminologies

Technology and social media affected the use of word as part of language in certain domain as a means of communication. The research objectives were to find out the types of word formation, the dominant type and the reason of dominancy of word formation of photography terminologies in online magazine outdoorphotographer.com. It was a descriptive qualitative research concerning on exploring language particularly on word level. Data were collected from articles published on online magazine from January to August 2018 by reading, note-taking and check-listing. To analyze the types of word formation, a theory by Stockwell and Minkova was used and to analyze the meaning of the terminologies, Cambridge and Oxford dictionaries were used. The result showed that there were 198 photography terminologies found. These terminologies were classified into six types of word formation, namely acronym (12 data), borrowing (3 data), compounding (166 data), clipping (3 data), derivation (3 data) and eponym (1 datum). The most dominant type was compounding. It was very dominant due to its simplicity to form a new word by simply combining two or more words without any change of its elements. This research revealed many photography terminologies that could be used to enrich vocabularyKeywords: Word formation, Photography terminologies, Outdoorphotographer.com

WORD FORMATION OF PHOTOGRAPHY TERMINOLOGIES

Technology and social media affected the use of word as part of language in certain domain as a means of communication. The research objectives were to find out the types of word formation, the dominant type and the reason of dominancy of word formation of photography terminologies in online magazine outdoorphotographer.com. It was a descriptive qualitative research concerning on exploring language particularly on word level. Data were collected from articles published on online magazine from January to August 2018 by reading, note-taking and check-listing. To analyze the types of word formation, a theory by Stockwell and Minkova was used and to analyze the meaning of the terminologies, Cambridge and Oxford dictionaries were used. The result showed that there were 198 photography terminologies found. These terminologies were classified into six types of word formation, namely acronym (12 data), borrowing (3 data), compounding (166 data), clipping (3 data), derivation (3 data) and eponym (1 datum). The most dominant type was compounding. It was very dominant due to its simplicity to form a new word by simply combining two or more words without any change of its elements. This research revealed many photography terminologies that could be used to enrich vocabularyKeywords: Word formation, Photography terminologies, Outdoorphotographer.com

Bank Portfolio Management under Credit Market Imperfections

This paper examines bank portfolio management under banking regulation and asymmetric information about borrower types and screening by banks and imperfect competition in the credit market. A bank tries to maximize expected profit subject to a portfolio variance constraint. The analysis yields the following results: For a monopoly bank, the incentive constraint of the efficient type of borrowers will be binding and the participation constraint of the inefficient type of borrowers will be binding. Further, given the variance constraint being binding, the optimal portfolio will be on the efficiency frontier. The paper also examines duopoly competition between aggressive (predator) and defensive (prey) banks and the scope for potential cooperation and reveals that among the alternatives of natural monopoly, entry deterrence, takeovers and efficient portfolio diversification through mergers or interest swaps, the cooperative efficient portfolio diversification strategy will dominate any non-cooperative strategy whenever portfolio returns are negatively correlated between any pair of interacting banks as it reduces portfolio variance for a given package of interest and loans.

A typology of lexical borrowing in Modern Standard Chinese

The question of how best to classify Modern Standard Chinese loanwords is rather a fraught one. Various principles of categorization have been proposed in the literature; however, previous classification systems have generally covered only a relatively small proportion of all loanwords currently in use. Even attempts to provide an exhaustive catalog of lexical borrowing strategies have often been characterized by non-transparent structure, internal inconsistency or even incompleteness. This has hindered meaningful cross-linguistic comparisons of language change in Modern Standard Chinese vis-à-vis other languages. The aim of this paper is to present a new and clearly structured, comprehensive inventory of the different types of lexical borrowing that have occurred in Modern Standard Chinese over the past 30 to 40 years. Systematic cross-linguistic comparisons reveal that examples of almost all of the categories of lexical borrowing noted in the literature on English language change can likewise be provided in relation to Modern Standard Chinese. In addition, Chinese offers several options for borrowing lexical items not available to speakers of English. Overall, this paper presents a picture of Modern Standard Chinese speakers as cultivating a flexible, creative, playful approach to their use of language. The explicit recognition of the fact that many so-called “alphabetic words” are established loanwords is found to have implications for the typological classification of Chinese script, as well as for other fields such as second language teaching. A secondary finding not anticipated in the research question is that Chinese orthography shows tentative early signs of potentially developing from a morpho-logographic to a phonetic writing system.

A Comparative Study of Prudential Regulation on Loan Classification and Provisioning of the South East European Countries

This paper has been prepared to describe the regulatory measures regarding Loan classification and provisioning of South East Europe countries like Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, Macedonia, Montenegro, Serbia, and Slovenia. A proper loan classification and provisioning system ensures credibility of the financial system that in turn restores trust and confidence in the mind of depositors. Determining what constitutes an adequate level of provisions to absorb credit losses is often subject of debate between banks and supervisors, as changes in provisioning estimate an immediate impact in bank earnings and, eventually, regulatory capital. A comparative analysis in this study between South East Europe (SEE) countries shows that countries have the regulatory measures which correspond with international standards. However, the criteria for classifying and provisioning loan portfolios depend on the prudential policies of the central banks. In the area of NPL definition, we find that almost all of the countries in the region have some type of asset classification system in place covering all types of borrowers. Non performing exposures in the region are generally defined three criteria: 90 days past due status, borrower bankruptcy, and the significant financial difficulty of the borrower. Countries with the highest rate of non‑performing loans (2005–2015) are Serbia, Montenegro, Albania, while the countries with the highest percentage of coverage with provisions are: Kosovo, Macedonia and Serbia.

Characteristics of borrowers likely to benefit from loan modifications

PurposeThe purpose of this paper is to identify the characteristics of borrowers likely to benefit from loan modifications (restructuring) which includes concessions provided to the borrower from the lender.Design/methodology/approachData were drawn from the US Department of Agriculture Farm Service Agency (FSA) for borrowers who had received an operating loan modification during 2005-2010. A logistic regression model is estimated to identify the characteristics associated with the likelihood of a borrower paying the modified loan as agreed or receiving a subsequent loan modification within seven years. Explanatory variables included financial condition, type and year of loan modification, farm type, organizational type, borrower demographics, and region.FindingsLoans requiring more complex loan modifications and borrowers with previous loan restructuring, larger farms, little equity in loan collateral, little or no capital, and/or little to no liquidity are less likely to perform following loan restructuring, which could suggest a possible futility in providing concessions to these types of borrowers. Many of these borrowers ended up having a subsequent restructure within a short period of time. Most of the regional variability in loan performance appears to have been a result of land values and commodity prices and not jurisdictional laws.Originality/valueFSA has followed a policy of providing loan modifications to the borrowers experiencing repayment problems for more than 25 years. Though farm financial conditions have remained relatively strong through 2016, a continuation of the low farm incomes and declining farm real estate values could increase farm loan repayment problems in upcoming years and increase interest in farm loan modifications from both lenders and policymakers. FSA’s experience provides a rich data source to examine and provide a better understanding of the costs and benefits associated with loan modifications.

Capital Requirements in Supervisory Stress Tests and Their Adverse Impact on Small Business Lending

This paper estimates the implicit capital requirements in the U.S. supervisory stress tests. Our results show that stress tests are imposing dramatically higher capital requirements on certain asset classes – most notably, small business loans and residential mortgages – than bank internal models and Basel standardized models. By imposing higher capital requirements on loans to small businesses and mortgage loans, stress tests are likely curtailing credit availability for the types of borrowers that lack alternative sources of finance. In addition, we identify the impact of supervisory stress tests on the availability of credit to small businesses by analyzing differences in small business loan growth at banks subject to stress tests versus those that are not. Our results indicate that the U.S. stress tests are constraining the availability of small business loans secured by nonfarm nonresidential properties, which accounts for approximately half of small business loans on banks’ books.

The pragmatic necessity of borrowing

Abstract In traditional research, necessary and luxury loanwords have often been opposed to each other as representing two fundamentally different types of borrowing. However, the terms of necessity and luxury have been shown to be problematic, as necessary loanwords can be avoided by choosing alternative types of contact-induced innovations in the recipient language, and from a usage-based perspective, speakers also perceive a certain ‘need’ for luxury borrowings. In my paper, I will thus rephrase the distinction in terms of catachrestic (~necessary) vs. non-catachrestic (~luxury) borrowings (Winter-Froemel, 2011; Onysko and Winter-Froemel, 2011) and focus on the latter group in order to investigate basic principles motivating the introduction of the loanwords in the recipient language. More specifically, I will discuss euphemism, dysphemism, and playfulness, which have been proposed in previous research as basic functions of borrowings (see, e.g. Carstensen, 1965; Galinsky, 1967), and I will explore how these concepts can be refined from a usage-based perspective. Finally, I will turn to the function of naming, which is traditionally considered to be fundamentally different from the pragmatically based factors listed above. Contrary to this belief, I will argue that naming also has a pragmatic dimension by virtue of speakers’ intentions to (re)conceptualize the objects in question. The broad variety of pragmatic motives identified underpins the necessity to adopt a usage-based approach to linguistic borrowing, and the potential of analyzing borrowings according to their cognitive and communicative value.