Creditor Rights and the Credit Market: Where Do We Stand?

This paper reviews empirical evidence on the impact of creditor rights regulations on credit market breadth and the credit cycle. It confirms results that were questioned regarding the impact of creditor rights regulations on the size of credit markets, and shows that the degree to which creditors are protected has a significant impact on the potential size of credit crunches.Simulations suggest that the average credit to GDP ratio for Latin America could be doubled if creditor rights regulations were put in place and law enforcement increased to developing country levels.

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Bibliographic Details
Main Author: Inter-American Development Bank
Other Authors: Arturo Galindo
Format: Working Papers biblioteca
Language:English
Published: Inter-American Development Bank
Subjects:Microbusiness, Financial Market, credit market;WP-448;credit control;debtor and creditor;finance companies,
Online Access:http://dx.doi.org/10.18235/0010792
https://publications.iadb.org/en/creditor-rights-and-credit-market-where-do-we-stand
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Description
Summary:This paper reviews empirical evidence on the impact of creditor rights regulations on credit market breadth and the credit cycle. It confirms results that were questioned regarding the impact of creditor rights regulations on the size of credit markets, and shows that the degree to which creditors are protected has a significant impact on the potential size of credit crunches.Simulations suggest that the average credit to GDP ratio for Latin America could be doubled if creditor rights regulations were put in place and law enforcement increased to developing country levels.