Theory Of Credit Rationing

Loan and credit can be defined as the value transference that requires repayment in future. Generally speaking, it is credit; but narrowly speaking, it refers to the loan activity through banks. Loan and credit have attracted wide attention of economists since it originated. At the same time varieties of credit theories have been set up.There are two kinds of credit theories in foreign countries. One is equilibrium credit theory, such as The Loanable Funds Theory；The other one is none-equilibrium credit theory, such as financial restraint. In equilibrium credit theory, market can make the money demand and supply reach equilibrium automatically by the function of interest rate. However in practice, commercial banks usually make use of none-price methods to meet loan demands that is called credit ration. Thus some borrowers still can't get loans from banks even if they are willing to pay the equilibrium interest rate. So what is the definition of credit ration? When commercial banks face the excessive loan demands, they often don't increase savings supply by increasing the savings interest rate. On the contrary, they depress the loan demands to reach the equilibrium of credit market. The above phenomenon is called credit ration. The existence of credit ration shows that it is difficult to reach the credit equilibrium by the function of credit market automatically.Adam. Smith and Keynes noticed this phenomenon in the credit market, but they both considered it as a casual thing. In 1981 Stiglitz and Weiss explained it by using imperfect information theory. By analyzing the adverse choise and moral hazard in the credit market, they proved that there was a long-term ration equilibrium in it. Definitely it was another challenge for the classical economy and promote the financial market theory to develop.Over the past several years, China's academic field has conductednumerous researches on credit theories and policies, and has made some progress. But it should be noted that we have done very little comparative research on western credit theories. Since it becomes clear that the objective of China's reform is to establish the system of socialist market economy, a lot of different views exist on such theoretical issues as whether the central bank should have the function of structural adjustment, whether we need the central bank to use credit policies to adjust the industrial structure, and under the market economic system, whether we need to adjust the structure of the financial market. In practice, the central bank has been using currency policies to adjust the structure in addition to adjusting the aggregates. Especially, since the mid of 1990's, the central bank's structural adjusting function has been strengthened, rather than weakened, and thus credit policies system needed to be established or improved. A theoretical answer should be given on these issues. Therefore, the study of credit theories and policies is of both theoretical and practical significance.In this thesis, the author firstly analyzes the credit market equilibrium, then focuses on the research in the credit ration phenomenon in the credit market. In the end, the development proceedings of credit contract behavior of China's commercial banks are discussed under the background of economic transmission, meanwhile, the impact on macro-economy by the credit ration is also analyzed. The whole thesis includes five chapters:To start with the recall of past credit equilibrium theory in credit market, the first chapter analyzed it both in perfect and imperfect competition, which is also the foundation of the whole thesis. Next on the basis of no-warlpas equilibrium,the author introduces the definition of credit ration and describes the credit ration equilibrium, which is the content of the second chapter. After that, the third chapter puts emphasis on the systematic summary on foreign credit ration theory. Several models are introduced and discussed including Stiglitz-Weiss Model and Bester-Hellwig Model and Jaffee-Russell...