Information sharing in credit markets: incentives for incorrect information reporting

The introduction of institutions of credit information sharing - private credit bureaus and public credit registries - in the market for bank loans represent one of the possible solutions of information asymmetry problem, - the problem which the creditors tend to face. However the possibility of information sharing influences the bank's incentives in two different ways. While it disciplines the borrowers and, therefore, reduces the share of bad loans, a bank loses the competitive advantage, namely the monopolistic knowledge about the data in its clients' credit histories. Does the bank have an opportunity at its disposal to use the benefits of information sharing without losing its competitive advantage and its clientele? One way to do so is to report false data on borrowers. This paper analyses the bank's incentives for such opportunistic behavior and describes the impact of false information reporting on the characteristics of market equilibrium. The opportunity to get extra profit and to offer less expensive credit to new clients explains why banks prefer the strategy of dishonest behavior. This paper outlines the role of the informational intermediary in quality control for the data, contained in credit reports. Also, it describes the conditions under which verification of a certain share of reports provides that the parameters characterizing the equilibrium are equal to those in no information asymmetry situation.

2D hybrid modeling of defects in an ultrasonic inspection situation

Advanced methods of nondestructive evaluations (NDE) are widely used for in-service inspection in many industrial applications, e.g. nuclear and aerospace industries. In these applications the components are exposed to different degradation mechanisms (e. g. fatigue, corrosion, stress corrosion cracking). In-service caused defects such as fatigue and stress corrosion cracks can be sized and monitored in order to postpone repairs or replacements. The reliability of NDE methods and the interaction between applied energy and addressed defect is highly dependent on the equipment adjustment to a specific object and to the expectation of the crack features. The crack feature and morphology vary widely between different crack mechanisms and between material types, in which crack appears. Complex shaped defects, such as fatigue and stress corrosion cracks (SCC), are in many cases difficult to characterize with ultrasonic NDE methods. SCC has in many cases a heavily branched macroscopic shape with a large number of crack tips. Ultrasonic NDE method is not always reliable in sizing such defects, as the diffraction from the crack tips is commonly used as the basis for such analysis. In this case, thoroughly validated mathematical models could be used to do the parametrical studies that address such interactions.In the current work, a developed hybrid model is described. This model is based on a combination of a semi-analytical model with a numerical approach. The basic idea is to use the numerical solution for interaction between the wave and the complex shape defect, which could be done by surrounding it with a volume modelled by a finite element scheme. The analytical method is used for describing the wave propagation between the probe and the volume that contains the actual defect. Using hybrid models for parametrical study, could help to avoid costly and time-consuming experimental work

Save or borrow – what determines Russian households’ financial strategies?

This paper examines what influences Russian households’ decisions to save and borrow. We use the 2008 data from the 17th round of the Russia Longitudinal Monitoring Survey (RLMS-HSE). Our results show that the determinants of saving and borrowing are not only those suggested by economic theory but also include psychological and sociological considerations: smarter respondents, who are satisfied with their lives and inclined to help other people, are more likely to save. Those who enjoy stable or improving financial conditions and/or are satisfied with them are more likely to save and less likely to borrow. Financial literacy, a factor cited by institutional theory as positive for both saving and borrowing from banks, lost its significance at the onset of the financial crisis. Household income, suggested by economic theory as a basis for choosing a financial strategy, was found to have much less influence on savings and to have a positive influence on borrowing, confirming the rationing theory rather than inter-temporal choice theory. Surprisingly, the fear of job loss does not make people save more, contrary to the precautionary motive.household; Russia; saving; bank loans

Legal dualism of local government in Russia

The article justifies the statement about the legal dualism of local government in modern Russia

Information sharing in credit markets: incentives for incorrect information reporting

The introduction of institutions of credit information sharing - private credit bureaus and public credit registries - in the market for bank loans represent one of the possible solutions of information asymmetry problem, - the problem which the creditors tend to face. However the possibility of information sharing influences the bank's incentives in two different ways. While it disciplines the borrowers and, therefore, reduces the share of bad loans, a bank loses the competitive advantage, namely the monopolistic knowledge about the data in its clients' credit histories. Does the bank have an opportunity at its disposal to use the benefits of information sharing without losing its competitive advantage and its clientele? One way to do so is to report false data on borrowers. This paper analyses the bank's incentives for such opportunistic behavior and describes the impact of false information reporting on the characteristics of market equilibrium. The opportunity to get extra profit and to offer less expensive credit to new clients explains why banks prefer the strategy of dishonest behavior. This paper outlines the role of the informational intermediary in quality control for the data, contained in credit reports. Also, it describes the conditions under which verification of a certain share of reports provides that the parameters characterizing the equilibrium are equal to those in no information asymmetry situation

Information sharing in credit markets: incentives for incorrect information reporting

The introduction of institutions of credit information sharing - private credit bureaus and public credit registries - in the market for bank loans represent one of the possible solutions of information asymmetry problem, - the problem which the creditors tend to face. However the possibility of information sharing influences the bank's incentives in two different ways. While it disciplines the borrowers and, therefore, reduces the share of bad loans, a bank loses the competitive advantage, namely the monopolistic knowledge about the data in its clients' credit histories. Does the bank have an opportunity at its disposal to use the benefits of information sharing without losing its competitive advantage and its clientele? One way to do so is to report false data on borrowers. This paper analyses the bank's incentives for such opportunistic behavior and describes the impact of false information reporting on the characteristics of market equilibrium. The opportunity to get extra profit and to offer less expensive credit to new clients explains why banks prefer the strategy of dishonest behavior. This paper outlines the role of the informational intermediary in quality control for the data, contained in credit reports. Also, it describes the conditions under which verification of a certain share of reports provides that the parameters characterizing the equilibrium are equal to those in no information asymmetry situation

Comparison between three mathematical models of three well defined ultrasonic NDT cases

Ultrasonic nondestructive testing (NDT) is commonly used for in-service inspection in different areas. But reliability of NDT method is highly dependent on the equipment and crack features. Although, it is possible to use thoroughly validated mathematical models to avoid complicated and costly experimental work, when it is necessary to qualify new procedures. Finite Element Model (FEM) is a powerful tool, which is commonly used for such cases. In this paper three mathematical models of three well defined cases will be compared with each other