Gersbach, Hans; Uhlig, Harald - Sonderforschungsbereich 649: Ökonomisches Risiko, … - 2006
We examine the coexistence of banks and financial markets, studying a credit market where the qualities of investment … moral-hazard problems by securing a portion of a repayment in the case of non-investment. Financial markets operated by …, standard banks are forced to increase repayments, since financial markets can attract the highest-quality borrowers. This, in …