Study Shows Ineffectiveness of Targeted Credit Rationing in Banking
To what extent does the shift towards (or away from) the rationing of capital to specific firms affect these firms' controversial practices?
- To what extent does the shift towards (or away from) the rationing of capital to specific firms affect these firms' controversial practices?
- This allowed them to explore the dynamics of banking relationships and the provision of credit.
- Credit rationing did affect banking relationships, Slutzky says.
- However, these firms for the most part initiated new relationships with non-targeted banks and managed to fully substitute credit, offsetting the intended effect of the initiative."