Informational Easing : Improving Credit Conditions through the Release of Information

  title={Informational Easing : Improving Credit Conditions through the Release of Information},
  author={Matthew Pritsker},
  • Matthew Pritsker
  • Published 2009
o ensure repayment of borrowed funds, lenders require that borrowers undergo costly credit evaluations. In the financial sector, credit often flows along chains of borrowers and lenders who are already familiar with each other’s creditworthiness—a process that minimizes the cost of credit evaluations. However, if the creditworthiness of key participants along a chain is called into question, the chain can break and cut off the flow of credit to final borrowers. If enough chains in the economy… CONTINUE READING

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