| Title |
The Financing Model of Credit Rationing:
A Study on Contract Banking System
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| Author |
Dr. Hua Zeng, Professor Kai Li |
| Contact Information |
Northeastern University, Shenyang , China |
| Key words |
credit rationing, financing model, contractual main banking system |
| Abstract |
In current Chinese credit market, interest rate is not capable of leading the credit supply of the bank in many cases, even when the borrowers are willing to take high interest rates, and the bank is able to continue its credit rationing. Through economic analysis, this paper reveals the necessity of credit rationing undertaken by the bank under informational imbalanced circumstances. The analysis will ultimately reveal the economic basis of credit rationing and point out that credit rationing is the biggest issue in the bank's external financing. Therefore, it may be said that the solution to credit rationing is at the same time a solution to industry's financing difficulties. It is particularly significant in context of current economic development in China . This paper concludes that the contractual model of main banking system is a feasible and efficient model of financing.
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| Full-text |
Contact: Dr.Obeidat at mobeidat@spsu.edu , or lsun@spsu.edu |
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