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Collateral and Lending

  • Andrada BilanEmail author
  • Hans Degryse
  • Kuchulain O’Flynn
  • Steven Ongena
Chapter
Part of the Palgrave Macmillan Studies in Banking and Financial Institutions book series (SBFI)

Abstract

In this chapter, we review the different forms of collateral pledged by borrowers’ bank loans and the role of collateral in reducing transaction costs. We start with contributions that study how fluctuations in real estate prices affect economic growth because they change the value of the collateral stock individuals and firms hold. We then review recent evidence on the role that movable and patent collateral play in easing lending frictions. Finally, we discuss the importance of legal frameworks that enforce creditor rights and, in consequence, enhance the use and benefits of pleadgeable assets.

Keywords

Banks Lending Collateral Information frictions Monetary policy Bank regulation Patents Technology Movable assets Real estate Law 

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Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Andrada Bilan
    • 1
    Email author
  • Hans Degryse
    • 2
  • Kuchulain O’Flynn
    • 1
  • Steven Ongena
    • 1
  1. 1.Department of Banking and FinanceUniversity of ZurichZürichSwitzerland
  2. 2.Faculty of Economics and BusinessKatholieke University of LeuvenLeuvenBelgium

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