04
Jun
2018
14:15
- 15:45
IWH Research Seminar
Interest Rates, Market Power, and Financial Stability
Who
David Martinez-Miera
(University of Madrid)
Where
IWH conference room
This paper analyzes the effects of policy rates on financial intermediaries' risk-taking decisions. We consider an economy where (i) intermediaries have market power in granting loans, (ii) intermediaries monitor borrowers which lowers their probability of default, and (iii) monitoring is not observable which creates a moral hazard problem.