Series: IMF Working Papers
Author(s): Thierry Tressel , and Thierry Verdier
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 March 2007
Keywords: financial globalization, domestic banks, collusion, bailout guarantees, bank capital, foreign banks, fdi, credit market, Economic Growth of Open Economies, Monetary Growth Models,
We model an economy in which domestic banks and firms face incentive constraints, as in Holmstrom and Tirole (1997). Firms borrow from banks and uninformed investors, and can collude with banks to reduce the intens...