Popular and academic discussions of bank lending behavior often invoke the idea of cycles in the standards banks use to screen potential borrowers. Such cycles could result from an inherent tendency for banks to overextend themselves during expansions of credit, taking on excessive risk. On the...

Central bank or International Monetary Fund lending should be regarded as a line of credit, analogous to private line-of-credit products. Contractual provisions in private line-of-credit arrangements are designed to control managerial moral hazard and provide a means for profit-maximizing...

This consideration of central bank lending as a publicly provided line of credit begins by describing how private line-of-credit contracts control moral hazard and limit lending to insolvent borrowers. The fundamental problem for a central bank is to credibly commit to limit its lending. Failure...

The authors describe a method of assessing the potential effect of errors in variables in the logit regression model with continuous-valued independent variables. They then apply the method to a model of lending discrimination in which measurement error would bias estimates of discrimination....