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'Rust in peace': Why are Germany’s bridges and schools falling apart?Oliver HoltemöllerThe Guardian, June 3, 2025
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.
