| Item Type |
Monograph
(Discussion Paper)
|
| Abstract |
Capital reallocation from unprofitable to profitable firms is a key source of productivity gain in an innovative economy. We present a model of credit reallocation and focus on the role of banks: Weakly capitalized banks hesitate to write off non-performing loans to avoid a violation of regulatory requirements or even insolvency. Such behavior blocks credit to expanding industries and results in insufficient credit reallocation across sectors and a distorted capital allocation. Reducing the cost of bank equity, tightening capital requirements, and improving insolvency laws relaxes constraints and mitigates distortions. |
| Authors |
Keuschnigg, Christian & Kogler, Michael |
| Language |
English |
| Subjects |
economics |
| Date |
February 2017 |
| Place of Publication |
University of St Gallen |
| Depositing User |
Dr. Mirela Keuschnigg
|
| Date Deposited |
06 Mar 2017 14:08 |
| Last Modified |
20 Jul 2022 17:30 |
| URI: |
https://www.alexandria.unisg.ch/publications/250534 |
Schumpeterian Banks: Credit Reallocation and Capital Requirements
![[img]](http://www.alexandria.unisg.ch/style/images/fileicons/oa_orange.png)
