Abstract

http://ssrn.com/abstract=659382
 
 

Citations



 


 



Passive Creditors


Koen J. L. Schoors


Ghent University - Centre for Russian International Socio-Political and Economic Studies (CERISE); Ghent University - Department of General Economics

Konstantin Sonin


Higher School of Economics; Centre for Economic Policy Research (CEPR)


International Finance, Forthcoming

Abstract:     
Creditors are often passive because they are reluctant to show bad debts on their balance sheets. We propose a simple general equilibrium model to study the externality effect of creditor passivity. The model yields rich insights in the phenomenon of creditor passivity, both in transitional and developed market economies. Policy implications are deduced. The model also explains in what respect banks differ from enterprises and what this implies for policy. Commonly observed phenomena in the banking sector, such as deposit insurance, lender of last resort facilities, government coordination to work out bad loans and special bank closure provisions, are interpreted in our framework.

Keywords: Creditor passivity, bankruptcy, arrears, bad loans, bank closure

JEL Classification: G21, G28, G33, P5

Accepted Paper Series


Not Available For Download

Date posted: February 3, 2005  

Suggested Citation

Schoors, Koen J. L. and Sonin, Konstantin, Passive Creditors. International Finance, Forthcoming . Available at SSRN: http://ssrn.com/abstract=659382

Contact Information

Koen J. L. Schoors
Ghent University - Centre for Russian International Socio-Political and Economic Studies (CERISE) ( email )
Tweekerkenstraat 2
Ghent, 9000
Belgium
+32 9 264 34 78 (Phone)
+32 9 265 35 99 (Fax)
Ghent University - Department of General Economics ( email )
Tweekerkenstraat 2
Ghent, 9000
Belgium
+32 9 264 34 78 (Phone)
+32 9 264 35 99 (Fax)
Konstantin Sonin (Contact Author)
Higher School of Economics ( email )
20 Myasnitskaya street
Moscow, 119017
Russia

Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
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