Consumer Default, Credit Reporting, and Borrowing Constraints

• 成果类型: Article
• 署名作者: Garmaise, Mark J.; Natividad, Gabriel
• 署名单位: Universidad de Piura
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12522
• 发表日期: 2017
• 页码: 2331-2368
• 关键词: household leverage; liquidity; bankruptcy; MARKET; debt; RISK; consumption; ratings; finance; CHOICE

摘要

Why do negative credit events lead to long-term borrowing constraints? Exploiting banking regulations in Peru and utilizing currency movements, we show that consumers who face a credit rating downgrade due to bad luck experience a three-year reduction in financing. Consumers respond to the shock by paying down their most troubled loans, but nonetheless end up more likely to exit the credit market. For a set of borrowers who experience severe delinquency, we find that the associated credit reporting downgrade itself accounts for 25% to 65% of their observed decline in borrowing at various horizons over the following several years.