How much should debtors be punished in case of default?

Resumo

This study investigates the relationship between debtor punishment and the development of the credit market. We empirically analyze how the level of debtor punishment relates to the credit market expansion. We find evidence that an increase in debtor punishment tends to produce a positive effect on credit markets for states with low level of punishment and a negative effect for states with high level of punishment. Hence, there is an intermediate level of debtor punishment that maximizes the size of the personal credit market. This intermediate level accounts for the need of creditors' protection to reduce moral hazard, to encourage the supply of credit, and for the need to protect borrowers from a bad state of nature.

Ficha do documento

Tipo

Artigo científico

Ano

2015

Instituição

Springer

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Acesso restrito

DOI

10.1007/s10693-013-0186-y

Identificador

oai:repositorio.fgv.br:10438/23454

Palavras-chave

CreditBankruptcyRegulation and business lawPersonal bankruptcy lawFinançasDevedores e credoresBancos - Regulamentação