Abstract World banking systems are almost invariably populated by relatively diverse financial institutions. This paper studies the operation of credit markets where heterogeneous banks compete for investment projects of varying quality in the presence of informational asymmetries. We emphasize on two dimensions of heterogeneity – access to project-specific information vis-à-vis funding costs – which naturally reflect lenders’ comparative disadvantages in the competitive landscape. Two main findings stand out. First, competition across heterogeneous banks can produce multiple equilibria. Thus, economies with similar fundamentals may well display a variety of interest rates and/or market shares for the operating institutions. Second, market failures (overlending) always prove mitigated in heterogeneous banking systems, relative to a world with equally uninformed lenders. This discipline effect however comes with a chance for market fragility, whereby modest changes in the business environment or other fundamentals can trigger large shifts in the price of credit, leading to either highly selective markets or rather ones which overfund ventures of the lowest quality. Extensions of the basic model and some policy implications are also discussed.

中文翻译：

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异构银行系统中的信贷分配

摘要世界银行体系几乎总是由相对多样化的金融机构组成。本文研究了信用市场的运作，在信息不对称的情况下，异类银行竞争质量不同的投资项目。我们强调异质性的两个方面-获得相对于融资成本的项目特定信息-自然反映出贷方在竞争格局中的相对劣势。有两个主要发现。首先，异构银行之间的竞争会产生多重均衡。因此，具有相似基本面的经济体很可能会为运营机构展示各种利率和/或市场份额。其次，在异构银行系统中，总是能够缓解市场失灵（超支）的情况，相对于没有同样消息灵通的贷方的世界。但是，这种纪律效应会带来市场脆弱性的机会，从而商业环境或其他基本面的适度变化会触发信贷价格的大幅度变动，从而导致市场高度选择性，或者导致那些投资过低质量企业的过度投资。还讨论了基本模型的扩展以及一些政策含义。