This paper analyzes how different types of bank funding affect the extent to which banks ration credit to borrowers, and the impact that capital requirements have on that rationing. Using an extension of the standard Stiglitz-Weiss model of credit rationing, unsecured wholesale finance is shown...

Credit crunches, such as in the recent financial crisis, generally occur when banks are themselves funding constrained. We use this observation to repair the workhorse Stiglitz–Weiss model of credit rationing. Recent research has invalidated the distributional assumption on which that model is...

The model of Stiglitz and Weiss ( American Economic Review , 1981, 71(3)) is the seminal analytical work on credit rationing. However, in a recent paper, Arnold and Riley ( American Economic Review , 2009, 99(5)) claim that the distributional assumption on which that model.s main result depends...

This paper analyzes the trade-off between financial stability and credit rationing that arises when increasing capital requirements. It extends the Stiglitz-Weiss model of credit rationing to allow for bank default. Bank capital structure then matters for lending incentives. With default and...

The model of Stiglitz and Weiss (American Economic Review, Vol. 71, No. 3, 1981) is the seminal analytical work on credit rationing. However, in a recent paper, Arnold and Riley (American Economic Review, Vol. 99, No. 5, 2009) claim that the distributional assumption on which that model's main...

This paper analyzes how different types of bank funding affect the extent to which banks ration credit to borrowers, and the impact that capital requirements have on that rationing. Using an extension of the standard Stiglitz-Weiss model of credit rationing, unsecured wholesale finance is shown...