Crime makes credit pricier, says Bank of Italy
Access to credit is adversely affected by crime, new research from the Bank of Italy posits.
The research finds that where the crime rate is higher, borrowers pay higher interest rates, pledge more collateral, and rely less on asset-backed loans and more on revolving credit lines than borrowers in low-crime areas.
The offences that affect the loan market are those that exogenously increase firm fragility, such as extortion and organised crime, and raise expected loss, given the likelihood of
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