Gustavo is a young doctor who lives in a country with a relatively inefficient legal and financial
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Gustavo is a young doctor who lives in a country with a relatively inefficient legal and financial system. When Gustavo applied for a mortgage, he found that banks usually required collateral for up to 300% of the amount of the loan. Explain why banks might require that much collateral in such a financial system. Comment on the consequences for such a system for economic growth.
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Financial intermediaries operating in countries with relatively weak property rights and legal syste...View the full answer
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Related Book For 
The Economics of Money Banking and Financial Markets
ISBN: 978-0321785701
5th Canadian edition
Authors: Frederic S. Mishkin, Apostolos Serletis
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