{
  "title": "Wholesale Bank Funding, Capital Requirements and Credit Rationing",
  "publication": "IMF Working Papers, January 31, 2013",
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  "summary": "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.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- 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.\n- Using an extension of the standard Stiglitz-Weiss model of credit rationing, the paper contrasts unsecured wholesale finance with funding by retail depositors and examines secured (collateralized) wholesale funding."
    },
    {
      "heading": "Methodology",
      "content": "- Analytical extension of the Stiglitz-Weiss model of credit rationing to incorporate different bank funding structures (retail deposits, unsecured wholesale funding, secured wholesale funding)."
    },
    {
      "heading": "Key Findings",
      "content": "- Unsecured wholesale finance amplifies the credit market impact of capital requirements as compared to funding by retail depositors.\n- Unsecured wholesale finance surged in the pre-crisis years.\n- Unsecured wholesale finance is increasingly being replaced by secured funding.\n- The collateralization of wholesale funding is found to expand the extent of credit rationing."
    },
    {
      "heading": "Policy Implications and Interpretation",
      "content": "- The interaction between capital requirements and the composition of bank funding matters for credit availability: when banks rely more on unsecured wholesale funding, capital requirements have a larger effect on credit rationing.\n- A shift from unsecured to secured wholesale funding changes the channel through which funding composition affects credit supply; collateralization, while altering funding risk, is associated with an expansion in credit rationing according to the model.\n- Policymakers should consider how regulatory capital requirements interact with prevailing funding structures (retail deposits, unsecured wholesale, secured wholesale) when evaluating effects on credit supply."
    },
    {
      "heading": "Subjects and Keywords",
      "content": "- Subject: Bank credit, Bank deposits, Banking, Credit, Loans\n- Keywords: credit rationing, financial crisis, WP\n\nSource: Wholesale Bank Funding, Capital Requirements and Credit Rationing, IMF Working Paper.\n\n---\n\n Content in this bundle\n\n- wp1330\n  - wp1330 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp1330 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/wholesale-bank-funding-capital-requirements-and-credit-rationing-40285"
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    "Authors: Itai Agur",
    "Published: January 31, 2013",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781475571622.001",
    "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, the paper contrasts unsecured wholesale finance with funding by retail depositors and examines secured (collateralized) wholesale funding.",
    "Analytical extension of the Stiglitz-Weiss model of credit rationing to incorporate different bank funding structures (retail deposits, unsecured wholesale funding, secured wholesale funding).",
    "Unsecured wholesale finance amplifies the credit market impact of capital requirements as compared to funding by retail depositors.",
    "Unsecured wholesale finance surged in the pre-crisis years.",
    "Unsecured wholesale finance is increasingly being replaced by secured funding.",
    "The collateralization of wholesale funding is found to expand the extent of credit rationing.",
    "The interaction between capital requirements and the composition of bank funding matters for credit availability: when banks rely more on unsecured wholesale funding, capital requirements have a larger effect on credit rationing.",
    "A shift from unsecured to secured wholesale funding changes the channel through which funding composition affects credit supply; collateralization, while altering funding risk, is associated with an expansion in credit rationing according to the model.",
    "Policymakers should consider how regulatory capital requirements interact with prevailing funding structures (retail deposits, unsecured wholesale, secured wholesale) when evaluating effects on credit supply.",
    "Subject: Bank credit, Bank deposits, Banking, Credit, Loans",
    "Keywords: credit rationing, financial crisis, WP",
    "**_wp1330**"
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