search query: @indexterm FINANCIAL INTERMEDIARIES / total: 113
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| Author: | Araujo, L. Minetti, R. |
| Title: | Financial intermediaries as markets for firm assets |
| Journal: | Economic Journal
2007 : OCT, VOL. 117:523, p. 1380-1402 |
| Index terms: | economic theory financial intermediaries assets allocation credit debt |
| Language: | eng |
| Abstract: | In this article, proposed is a theory of financial intermediation based on intermediaries' (here as: ints.) role in the reallocation (as: realloc.) of assets of distressed firms. It is suggested that ints. aggregate information (as: info.) on firms in credit relationships, using this info. to facilitate asset realloc. across firms. However, this role of ints. hinges on debt contracts granting lenders the right to foreclose assets of distressed borrowers and, hence, exclude the most productive asset users from the resale market. Characterized are the conditions under which ints. arise and under which their role in the credit market enhances their role as markets for firm assets. |
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