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Title: |
Financial Management of Credit System |
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Source: |
International Conference on Engineering and Business Management 2012(Part 2 Enterprise Operation and Management（2）)
(pp 1326-1328)
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Author(s): |
Jing Yang, School of Economics, Shandong Youth University of Political Science, Jinan, China |
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Abstract: |
This paper discusses the credit markets with imperfect information in developing countries. It shows the credit ration system and extends it to the developing countries with their special characteristics. I apply the “lemon market” model, credit rationing system and “standard debt contract” model in the credit market analysis. As for policy implications, macroeconomic stabilization policies often ignore the consequences of raising interest rates on default risks in times of financial crises. Accordingly they may be ineffective or even counterproductive in attracting investors and restoring financial stability. The models also illustrate the possible perils of large infusions of subsidized credit by the public sector.
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