Search

What began as a financial crisis in the United States in 2007-2008 quickly evolved into a massive crisis of the global real economy. We investigate the importance of the bank lending and firm borrowing channel in the international transmission of bank distress to the real economy - in particular, to real investment and labor employment by nonfinancial firms. We analyze whether and to what extent firms are able to compensate for the shortage in loan supply by switching banks and by using other types of financing. The analysis is based on a unique matched data set for Germany that contains firm-level financial statements for the 2004-2010 period together with the financial statements of each firm's relationship bank(s). We use instrumental variable estimations in first differences to eliminate firm- and bankspecific effects. The first stage results show that banks that suffered losses due to proprietary trading activities at the onset of the financial crisis reduced their lending more strongly than non-affected banks. In the second stage, we find that firms whose relationship banks reduce credit supply downsize their real investment and labor employment significantly. This effect is larger for firms that are unable to provide much collateral. We document that firms partially offset reduced credit supply by establishing new bank relationships, using internal funds, and issuing new equity.

Financial frictions represent a severe obstacle to firm innovativeness. The paper explores this link in times of crisis and provides new insights on the role of relationship lending for small and micro-sized firms. Not only small and medium enterprises (SMEs) have a lower probability to innovate and a higher likelihood to face financial constraints, their innovative propensity is also more sensitive to firm financial condition. The establishment of close ties with the lender bank can help overcoming financial barriers to innovation. By exploiting firm-specific proxies of relationship lending I document a highly nonlinear effect that is decreasing with the size of the firm, suggesting that small companies can gain disproportional benefits from banks’ accumulation of soft information, especially for the introduction of new products and processes.

Bakgrund: Kreditvärdighet är ett ämnesområde för bankerna att bedöma om en kund är kreditvärdig. Bankerna använder sig av olika bedömningsfaktorer för att bedöma huruvida företaget är en lämplig låntagare. Detta görs för att man skall få en uppfattande bild av företaget. Problemfråga: Hur går bankers kreditbedömning av små och medelstora företag till? Syfte: Syftet är att studera om bankerna skiljer sig åt vad det gäller kreditbedömningen för små och medelstora företag samt på vilket sätt de granskar informationen som de får av företagen. Metod: Syftet kommer att besvaras med en empirisk undersökning som grundar sig på teorin förtroende och principal-agentteorin. Vi har kompletterat teorierna med tidigare studier, vetenskapliga artiklar, litteraturer, årsredovisningar och intervjuer. Slutsats: Slutsatsen är att det inte finns några markanta skillnader i den här studien, därför att samtliga banker gör en allsidig bedömning av företaget för att bedöma kreditvärdigheten, genom att de tar hänsyn till både finansiella och icke-finansiella faktorer. En liten avvikelse som vi dock fann är att Handelsbanken betonar tron på verksamheten mer i jämförelse med Nordea, detta har göra med att frihet ges till Handelsbanken vid beviljande av krediten då banken är väldigt decentraliserad. Background: Creditworthiness is a subject for banks to assess whether a customer is creditworthy or not. The banks use different assessment factors in order to assess whether the company is a suitable borrowers. This is done in order to get a perception picture of the companies. Problem issue: How does banks credit evaluate to small and medium-sized enterprises? Purpose: The purpose is to study whether the banks proves to be different in terms of credit assessment for small and medium-sized enterprises and in what way they review the information they receive from companies Method: The purpose will be answered by an empirical study based on the theory of trust and principal-agent theory. We have complemented the theories with previous studies, scientific articles, literatures, annual reports and interviews. Conclusion: The conclusion is that there are no significant differences in this study because all banks make a comprehensive assessment of the company to assess creditworthiness, by taking into account both financial and non-financial factors. A small difference we found is that Handelsbanken underlines belief the business more in comparison with Nordea, this has to do with the liberty given to Handelsbanken in the granting of credit which the banks are highly decentralized.

The paper deals with the role that local banks (especially credit cooperative banks) might play in financially supporting the development of technological districts and innovative firms. After introducing the concept and features of technological districts, it focuses on the relations between districts and local banks and between the adoption of innovation and local banking. The central part is an econometric exercise aimed at measuring the weight of high value financial services over the income of a sample of Italian credit cooperative banks. Taking into account the cultural, managerial and organizational requirements of local banks, the work provides insights into how this category of banks can promote innovative financial services to help the development of high-tech districts and maintain a competitive position in relation to the larger banks.

How important are bank loans for corporate investment? A joint research paper by DIW Berlin, University of Hohenheim and Freie Universitaet Berlin shows that the overall amount borrowed by firms decreases if their relationship banks reduce their credit supply. As a consequence, firms have to downsize their investment spending and labor employment. This way, bank distress spills over to the real economy. However, the reduction in investment is smaller than the reduction in banks’ credit supply as firms are able to mitigate part of the shortage in credit supply by using other sources of financing. Welche Bedeutung haben Bankkredite für Unternehmensinvestitionen? Eine gemeinsame Studie des DIW Berlin, der Universität Hohenheim und der Freien Universität Berlin zeigt, dass ein Rückgang des Kreditangebots der Hausbanken zu einer geringeren Fremdkapitalaufnahme von Unternehmen führt. Dies wiederum reduziert deren Investitionstätigkeit und Arbeitsnachfrage. Banken, die über ausreichend Eigenmittel für die Vergabe von Unternehmenskrediten verfügen, sind daher wichtig für die gesamtwirtschaftliche Investitionstätigkeit und das Schaffen von Arbeitsplätzen. Allerdings führt ein Rückgang des Bankkreditangebots nicht in vollem Umfang zu geringeren Investitionen, da Unternehmen ein verringertes Kreditangebot durch Verwendung anderer Finanzierungsformen teilweise ausgleichen können.

The massive decline in international trade in 2008/09 is often attributed to the global deterioration in financial conditions after the bankruptcy of a US investment bank, Lehman Brothers. This paper examines the association between external finance and firm activity in Germany in more detail. In particular, we explore a novel data set that matches a full sample of quarterly bank-firm lending data with detailed information on borrowers and lenders. Our results indicate that foreign sales are insensitive to variations in external finance. While German banks affected by the crisis have significantly reduced their credit supply, we only observe a causal (negative) effect on domestic sales. Exporting firms, in contrast, seem to be particularly good borrowers.

Germany's bank-based financial system provides a high level of financial inclusion, measured by bank outreach and use of financial services. However, the most vulnerable individuals and small enterprises in Germany tend to be excluded or credit constrained. The quality of financial inclusion is impaired by a low level of financial literacy, which is also concentrated among specific population subgroups. The high level of financial inclusion can be attributed to relationship lending by public savings banks, credit cooperatives, public promotional banks, and guarantee banks using the "housebank" model, and financial consumer protection and credit reporting regulations and institutions. Programs involving microfinance institutions have been stopped. Financial inclusion of consumers with the aim of responsible finance may be improved by implementing the right to a basic bank account with an overdraft facility and protection against attachment, establishing public credit bureaus, redirecting banking regulation toward the protection of borrowers in long-term credit relationships, and strengthening financial education in schools. To foster entrepreneurship and access to funding for start-ups and innovative SMEs, entrepreneurship education and the venture capital market need to be further developed.

Germany’s bank-based financial system provides a high level of financial inclusion, measured by bank outreach and use of financial services. However, the most vulnerable individuals and small enterprises in Germany tend to be excluded or credit constrained. The quality of financial inclusion is impaired by a low level of financial literacy, which is also concentrated among specific population subgroups. The high level of financial inclusion can be attributed to relationship lending by public savings banks, credit cooperatives, public promotional banks, and guarantee banks using the “housebank” model, and financial consumer protection and credit reporting regulations and institutions. Programs involving microfinance institutions have been stopped. Financial inclusion of consumers with the aim of responsible finance may be improved by implementing the right to a basic bank account with an overdraft facility and protection against attachment, establishing public credit bureaus, redirecting banking regulation toward the protection of borrowers in long-term credit relationships, and strengthening financial education in schools. To foster entrepreneurship and access to funding for start-ups and innovative SMEs, entrepreneurship education and the venture capital market need to be further developed.

Includes bibliographical references. Number of sources in the bibliography: 102 Thesis (Ph. D.) -- University of Cyprus, Faculty of Economics and Management, Department of Economics, 2014. The University of Cyprus Library holds the printed form of the thesis. Η διατριβή με τίτλο «Δοκίμια για τη χρηματοπιστωτική διαμεσολάβηση» αποτελείται από τρία αλληλένδετα κεφάλαια που σχετίζονται με την βιβλιογραφία της εμπειρικής τραπεζικής. Στο πρώτο κεφάλαιο εκτιμούμε το βαθμό του ανταγωνισμού στον τραπεζικό τομέα για 12.206 τράπεζες που λειτουργούν σε 148 χώρες κατά την περίοδο 1997-2010, χρησιμοποιώντας τρεις μεθόδους: τον δείκτη Lerner, τον διορθωμένο με βάση την αποτελεσματικότητα δείκτη Lerner , και την ελαστικότητα του κέρδους. Οι εκτιμήσεις του οριακού κόστους που απαιτούνται για όλες τις μεθόδους, λαμβάνονται με τη χρήση ήμι-παραμετρικής μεθοδολογίας. Και οι τρεις δείκτες δείχνουν ότι οι συνθήκες ανταγωνισμού στον τραπεζικό τομέα επιδεινώθηκαν κατά τη διάρκεια της περιόδου 1997-2006, βελτιώθηκαν μέχρι το 2008, και επιδεινώθηκαν και πάλι στη συνέχεια. Τα επίπεδα του ανταγωνισμού διαφέρουν μεταξύ των περιφερειών και εισοδηματικών ομάδων, αλλά υπάρχει σταδιακή σύγκλιση στην πάροδο του χρόνου. Το τραπεζικό σύστημα είναι λιγότερο ανταγωνιστικό στην υπο-σαχάρια Αφρική και τις χώρες χαμηλού εισοδήματος και πιο ανταγωνιστικό στην Ευρώπη και την Κεντρική και τη Νότια Ασία και τις χώρες του ΟΟΣΑ. Η σχέση μεταξύ της ιδιοκτησίας και του ανταγωνισμού στον τραπεζικό τομέα είναι μια σημαντική ανησυχία στους υπευθύνους χάραξης πολιτικής σε ολόκληρο τον κόσμο, αλλά σπάνια εξετάζονται διεξοδικά σε ερευνητικό επίπεδο. Στο δεύτερο κεφάλαιο, για 131 χώρες και 13 χρόνια αντιπαραβάλουμε και ταιριάζουμε την ιδιοκτησία των τραπεζών με πάνω από 50.000 εκτιμήσεις για την τραπεζική δύναμη αγοράς. Θεωρούμε ότι η ιδιοκτησία δεν εξηγεί την τραπεζική δύναμη στην αγορά σε επίπεδο μεμονωμένων τραπεζών. Ωστόσο, σε επίπεδο χώρας, η ξένη ιδιοκτησία των τραπεζών έχει μια θετική και σημαντική επίδραση στην δύναμη αγοράς, κυρίως επειδή οι ξένες τράπεζες εισέρχονται μέσω συγχωνεύσεων ή εξαγορών και όχι μέσω επενδύσεων (πράσινες εισχωρήσεις). Οι αυξήσεις στην δύναμη αγοράς μπορούν να εξηγηθούν πλήρως από την αύξηση του χάσματος μεταξύ των τιμών της τράπεζας και του οριακού κόστους, αλλά όχι από τις αυξήσεις των τιμών ή μειώσεις του κόστους ξεχωριστά. Στο τελευταίο κεφάλαιο παίρνουμε την ανάλυση σε ένα διαφορετικό επίπεδο, όσον αφορά την κατανόηση της οικονομικής συμπεριφοράς των δανειακών σχέσεων. Αξιοποιούμε ένα μοναδικό σύνολο δεδομένων για σχέσεις τράπεζας-εταιρείας με βάση τα κοινοπρακτικά δάνεια και εξετάζουμε την επίδραση του πιστωτικού κινδύνου και των κεφαλαίων της τράπεζας στην απόδοση και κίνδυνο των εταιρειών. Τα δεδομένων μας είναι μια πολύ-επίπεδη διατομή, η οποία ουσιαστικά επιτρέπει τον έλεγχο για όλα τα τραπεζικά και εταιρικά χαρακτηριστικά μέσω των αντίστοιχων σταθερών αποτελεσμάτων (fixed effects), αποφεύγοντας έτσι ανησυχίες σχετικά τις παραλειπόμενες μεταβλητές. Βρίσκουμε ότι οι τράπεζες με υψηλότερο πιστωτικό κίνδυνο συνδέονται με πιο ριψοκίνδυνες επιχειρήσεις. Επίσης, διαπιστώνουμε ότι οι τράπεζες με υψηλότερους σταθμισμένους δείκτες κεφαλαιακής επάρκειας δανείζουν σε πιο ριψοκίνδυνες επιχειρήσεις με μικρότερη εμπορεύσιμη αξία. This thesis entitled “Essays on Financial Intermediation” is comprised of three interrelated chapters in the literature of empirical banking. In the first chapter we estimate the degree of competition in the banking sectors for 12,206 banks operating in 148 countries over the period 1997-2010 using three methods: the Lerner index, the adjusted Lerner index, and the profit elasticity. Marginal cost estimates required for all methods are obtained using a flexible semiparametric methodology. All three indices show that competitive conditions in banking deteriorated during the period 1997-2006, improved until 2008, and deteriorated again thereafter. Levels of competition differ across regions and income groups, but there is gradual convergence over time. Banking system is less competitive in sub-Saharan Africa and low income countries and more competitive in Europe and Central and South Asia and OECD countries. The nexus between ownership and competition in the banking sector is a major concern to policymakers around the world but one that is rarely comprehensively examined. In the second chapter, for 131 countries and 13 years we match bank ownership with over 50,000 bank-year estimates, of our aforementioned dataset, on individual bank market power. We find that ownership does not explain market power at the individual bank level. However, at the country level, foreign bank ownership has a positive and significant impact on market power mainly because foreign banks enter through mergers or acquisitions and not through greenfield investments. The increases in market power can be fully explained by increases in the gap between bank output prices and marginal costs but not by price increases or cost decreases separately. In the last chapter we take the analysis to a different level, concerning the understanding of the economic behaviour of lending relationships. We exploit a unique data set on bank-firm relationships based on syndicated loan deals to examine the effect of banks’ credit risk and capital on firms’ risk and performance. Our data set is a multilevel cross-section, which essentially allows controlling for all bank and firm characteristics through respective fixed effects, thus avoiding concerns regarding omitted variables. We find that banks with higher credit risk are associated with more risky firms, with lower profitability and market value. Even though the total bank capital does not seem to play a role in lending to risky firms, we find that banks with higher risk-weighted capital ratios do lend to riskier firms with less market value. Our results are indicative of a strong adverse selection mechanism and highlight the need to monitor the risky banks more closely, especially as we consider large and influential syndicated loan deals.

For many private firms, relationship lending is the only viable form of outside financing. Relationship lending typically relies on intertemporal loan pricing: losses from early years are recovered by information rents in later years, which stem from the lender's private information regarding the firm's creditworthiness. Our model shows that overly transparent financial reporting reduces the relationship lender's information rent such that the lender has insufficient incentive to offer early stage financing as a result. During financial distress, private firms find it easier to obtain liquidity support from relationship lenders when financial reporting is sufficiently opaque. Conservative opacity enables relationship lending more effectively than aggressive reporting. This paper seeks to explain why private firm financial reporting is (conservatively) opaque and raises concerns regarding recent regulatory efforts that require private firms to engage in more transparent financial reporting because such efforts may result in undesirable side effects.

In this paper, to begin with, we define soft information as qualitative, subjective information produced by banks through the establishment of long-term lending relationships. We then highlight the importance of soft information for cooperative and social banks in the screening, pricing and monitoring of their borrowers as a result of their institutional features (governance, values, etc.) and the specificities of their clientele. We finally emphasise the value of qualitative (economic, social and/or environmental) factors stemming from the production of soft information in predicting credit default events., info:eu-repo/semantics/published

We examine whether performance-sensitive debt (PSD) is used to reduce hold-up problems in long-term lending relationships. We find that the use of PSD is more common in the presence of a long-term lending relationship and if the borrower has fewer financing alternatives available. In syndicated deals, however, the presence of a relationship lead arranger reduces the use of PSD, which is consistent with hold-up being of lesser concern in such cases. Further, supporting our hypothesis that hold-up concerns motivate the use of PSD, we find a substitution effect between the use of PSD and the tightness of financial covenants.

We analyse whether relationship lending reduces borrowers’ probability of default and, if so, whether this beneficial effect also applies to borrowers who are more exposed to the economic downturn. By using unique, matched data of 43,000 firms and their lending institutions between 2008 and 2010, we document that the probability that a firm becomes distressed decreases if the creditor concentration is high and if the duration of bank-firm relationships is long. While these results appear to support the beneficial effect of relationship lending practices, we note that the organisational distance of banks and collaterals also matters both as a determinant of loan distress and loan downgrading. The results are stronger for smaller firms.

To sustain growth in an aging economy, it is important to ease the financing of small firms by bank loans. Using bank internal data of small business loans in Germany, we examine the determinants of loan rates in the period 1995-2010. Beyond characteristics of the firm, the loan contract, and the lending relationship, demographic aspects matter. However, collateral and relationship lending play a larger role in loan pricing than the entrepreneur's age. Banks do not seem to discriminate older borrowers by higher loan rates. We rather find statistical discrimination of younger borrowers because of their lower wealth. Single entrepreneurs obtain cheaper loans than married ones. Firms in peripheral regions with low population density are disadvantaged by higher loan rates compared to those in agglomerated regions.

International audience; In this paper, to begin with, we define soft information as qualitative, subjective information produced by banks through the establishment of long-term lending relationships. We then highlight the importance of soft information for cooperative and social banks in the screening, pricing and monitoring of their borrowers as a result of their institutional features (governance, values, etc.) and the specificities of their clientele. We finally emphasise the value of qualitative (economic, social and/or environmental) factors stemming from the production of soft information in predicting credit default events.

Mestrado em Ciências Empresariais Pequenas e médias empresas desempenham um papel importante na economia mundial. No entanto, a elevada dificuldade em aceder aos fundos necessários muitas vezes limita o crescimento destas empresas. Este estudo tem como propósito analisar alguns dos mais debatidos problemas no que a financiamento de PMEs diz respeito, particularmente Relacionamento Bancário e dificuldades no acesso ao financiamento. Posteriormente, realiza um exercício comparativo entre a percepção de PMEs na Região Autónoma dos Açores e as mais comuns considerações presentes na literatura. A maioria dos inquiridos considera que o acesso ao financiamento bancário é difícil, e percepciona os critérios relacionados com garantias e com o histórico de crédito da empresa como os mais importantes para as decisões de concessão de crédito dos bancos. A maioria dos inquiridos considera igualmente estar envolvido em Relacionamento Bancário, retirando benefícios dessa relação. Small and medium enterprises are crucial for economies all around the globe. However, their growth is constrained by strong difficulties in accessing the funds they imperatively need. This study reviews some the most common issues regarding SME finance, particularly difficulty accessing funds and Relationship Lending. It then aims to assess the perceptions of SMEs in the Azores region over those issues, to see if they match the literature considerations. The majority of the respondents claim they find it difficult to access finance from a bank, and consider trouble providing risk shifting factors and past success indicators as being the most important credit decision making criteria of banks. It is also found that most of the respondents are invested in a relationship with a bank, and those who are benefit from it, especially on collateral demands and on interest rates

In this paper we analyze the access to credit of innovative firms on the price and non-price dimensions of bank lending. Using information from two datasets, we use a propensity score matching procedure to estimate the impact of the innovative nature of firms on: (a) loan interest rates; (b) the probability of having to post collateral; and (c) the probability of overdrawing. Our analysis reveals that banks trade off higher interest rates and lower collateral requirements for firms involved in innovative processes. Further, innovative firms have a lower probability of being credit rationed than their non-innovative peers.

Svenska banker har genomgått flera finanskriser som resulterat i olika konsekvenser, bland annat kreditförluster. Intresset för varför en del banker drabbades mer medan andra drabbades mindre påverkade valet av problemområde. Många studier har gjorts beträffande kreditbeslut vid nya krediter, dock verkade området kring kredituppföljningen, det sekundära kreditbeslutet, vara relativt outforskat. Förhoppningen var att kunna bidra med kunskap som dels kunde vara användbar för kreditgivare, genom att dra lärdom av bra exempel, och dels vara brukbar för låntagarna. En annan önskan var att ge inspiration till ytterligare studier i ett relativt outforskat område. En noggrann kredituppföljning är också betydelsefull för samhället i stort. Syftet var att få en bättre bild av hur kredituppföljningsprocessen utförs i praktiken i svenska banker. Genom kvalitativa intervjuer har kredituppföljningen studerats hos sex banker i västra Sverige; Handelsbanken, Länsförsäkringar Bank, Swedbank, SEB samt två Fristående Sparbanker. Intervjupersonerna var personer med gedigen erfarenhet från utlåningsprocessen gentemot företag. Den empiriska undersökningen visade en stor överensstämmelse kring hur kredit-uppföljningen utförs i de banker som ingått i studien. Uppföljningsprocessen genomförs utifrån volym och någon form av riskklassificering. I beslutsunderlaget ingår såväl formella som informella delar, med andra ord både kvantitativ och kvalitativ information. Studien visade att både transaktions- och relationsutlåning är delar av det sekundära kreditbeslutet. En skillnad var hur stor betydelse de mjuka delarna har i kredituppföljningen. Min tolkning är att organisationskulturen har betydelse Swedish banks have underwent several financial crises that have resulted in different type of consequences, amongst other things, credit losses. The interest for why some banks were hit more than others, influenced the choice of the problem area. Many studies have been made regarding lender decisions on new loans, however, the area related to the credit monitoring, i. e. the secondary lender decision, seems to be relatively unexplored. The aim was to contribute with knowledge that partly could be useful for creditors, through learnings from good examples, as well as partly be useful for the borrowers. Another expectation was to inspire to further studies of an area that has not been investigated deeply so far. A throught credit monitoring is also important for the society as much. The purpose was to get a better picture of how the credit monitoring processes are performed in practise in Swedish banks. Through qualitative interviews, the credit monitoring processes have been studied att six banks in the west part of Sweden. The banks are; Handelsbanken, Länsförsäkringar Bank, Swedbank, SEB and two independent banks. The respondents were persons with a solid and senior experience from lending processes towards companies. The empirical study showed a high degree of consistency in how the credit monitoring are performed at the Swedish banks that were a part of the investigation. The monitoring process are carried out based on volume and some type of risk assessment. The decision material contains formal as well as informal information or in other words: both quantitative as well qualitative information. The study showed that both transactional as well as relationship lending are parts of the secondary lender decision. One difference that was noticed, was how big importance the soft factors have in the credit monitoring process. My interpretation is that the organizational culture has an influence on this.

Tidigare studier har identifierat två olika typer av information som kreditgivarna tar del av för att avgöra om kredittagaren är kapabel att betala sina skulder och fullfölja sina förpliktelser, transaktionsorienterad och relationsorienterad information (Rad et al., 2013; Gray et al., 2006). Dessa två huvudgrupper av information delas upp i olika bedömningsgrunder somSvensson (2003) presenterar i en analysmodell som används som grund för denna studies föreställningsram. Kreditbedömningen baseras till stor del på den finansiella informationen som ingår i den transaktionsorienterade informationen och som finns att tillgå i årsredovisningen. Årsredovisningen är dock en statisk presentation av företaget (Svensson, 2003) och bör därför kompletteras med ytterligare information.Kreditvärdighetsbedömningen sker utifrån företagets fortlevnad, företagets säkerheter och dess framtida värde, där säkerheter är tillgångar ställda som garantier under kredittiden. Dessa ställda säkerheter får ett säkrare värde om företaget har revisor. Med lagändringen som trädde i kraft i november 2010, som resulterade i en avreglering för revisionsplikten för mindre bolag i Sverige, har drygt 40 % av dagens ca 400 000 aktiebolag ingen revisor (Spängs, 2014).Syftet med uppsatsen var att utvärdera och beskriva vilken betydelse hård och mjuk information har för institutionella kreditgivare vid kreditbedömning av små och medelstora företag i Sverige. Vidare var syftet att utvärdera av vilken vikt det är att den transaktionsorienterade informationen är kvalitetssäkrad genom revision. För att uppfylla syftet med studien har en kvantitativ metod med deduktiv ansats använts, där primärdatainsamlats med hjälp av en webbaserad enkät riktad till företagsrådgivare inom bankväsendet som ligger till grund för empirin i denna studie. Det empiriska materialet har sedan analyserats mot sekundärdata som insamlats från vetenskapliga artiklar, litteratur och svenska lagar.Resultatet visar att kreditbedömningen av små och medelstora företag utifrån studiens urval styrker tidigare studier inom området och resultatet tyder på att revision för att kvalitetssäkra den finansiella informationen inte har avgörande roll för kreditbedömningen. Relationsorienterad information används vid kreditbedömning, men nyttjas inte i samma utsträckning som den transaktionsorienterade. (Rad et al., 2013; Gómez-Guillamón, 2003) Previous studies have identified two different types of information that lenders uses to decide if the borrower is able to pay its debts and fulfil their obligations, transaction-oriented and relationship-oriented information (Rad et al., 2013; Gray et al., 2006). These two main groups of information is divided into different assessment bases, Svensson (2003) presents ananalysis model that is used as the base for this study. Credit assessment is based on the financial information included in the transactional information that is available in the annual report. The annual report is, according to Svensson (2003), a static presentation of the company and should therefore be supplemented with additional information.Creditworthiness is based on the chance of going concern, the company's assets and its future value, where the collateral assets are pledged as guarantees during the credit period. These collateral assets get a more curtain value by the company's auditor. With the amendment which came into force in November 2010, which resulted in a settlement of audit requirementfor smaller companies in Sweden, has just over 40% of today's 400 000 incorporated companies no auditor (Spängs, 2014).The purpose of this paper was to evaluate and describe the significance that accountant information and relations has for institutional lenders in credit rating of SME’s in Sweden. A further purpose was to evaluate the importance of the assurance that the auditing of the transactional information provides. To fulfil the purpose of the study a quantitative method of deductive approach was used, where primary data collected through a web-based surveyaimed at business advisers within the banking system as the basis for empirical data in this study. The empirical data were then analyzed against secondary data collected from scientific articles, literature and Swedish laws.The result shows that the credit assessment of SME’s based on the study sample, evidence of previous studies in the subject and the results indicate that the auditing in ensuring the quality of the financial information not is crucial in the credit assessment. Relationship-oriented information is also used in the credit rating, but is not utilized to the extent as the transactionoriented information. (Rad et al., 2013; Gómez-Guillamón, 2003)

Whether bank failures have adverse effects on local economies is an important question for which there is conflicting and relatively scarce evidence. In this study, I use county-level data to examine the effect of bank failures and resolutions on local economies. Using quasi-experimental techniques as well as cross-sectional variation in bank failures, I show that recent bank failures lead to lower income and compensation growth, higher poverty rates, and lower employment. Additionally, I find that the structure of bank resolution appears to be important. Resolutions that include loss-sharing agreements tend to be less deleterious to local economies, supporting the notion that the importance of bank failure to local economies stems from banking and credit relationships. Finally, I show that markets with more inter-bank competition are more strongly affected by bank failure.

Financial frictions may represent a severe obstacle to firms' innovativeness. This paper shows the existence and quantifies the effects of financial barriers to the innovation propensity of Italian companies. Employing direct measures of financial constraints and a credit-score estimated ad hoc, I find firms that suffer from financial problems to have a probability of innovating that is significantly lower than sound companies (-30%). The paper also documents the existence of a feedback-effect of innovation on firms' financial position. Results suggest that the innovative propensity of a company is further affected by the consequences that the choice to innovate has on the likelihood of facing constraints. This in turn is reflected onto a stronger depressive effect of financial constraints on innovation (-34%). Finally, the paper also provides evidence on the role of soft information in mitigating financial obstacles for innovative companies. Relationship lending is found to improve the financial condition of more opaque (small) borrowers and to reduce the overall effect of financial constraints on innovation.

During the last decades, banks have progressively moved towards largest, centralized and hierarchical organizational structures. An increased investment in non-interest generating activities has also implied performance vulnerability, whose effects have been particularly destabilizing during the recent financial crisis. In this economic and financial contest, several banks have become increasingly concerned with controlling and analyzing their costs and revenues, as well as measuring the risks taken to produce acceptable returns. In line with these developments, recent literature has evolved examining alternative banking organizational models, risk and efficiency issues (Kano et al., 2011; Berger and Black, 2011; Fiordelisi et al., 2011). With reference to efficiency, the level of attention has increased due to the growing complexity and competitiveness of the market, and different methodological approaches have been proposed to investigate financial bank efficiency (Bos et al., 2009; Fiordelisi et al. 2011). Among efficiency determinants, size, capital, risk and environmental factors reveal to be the most investigated; conversely at our knowledge no empirical studies have analyzed whether relationship lending features influence bank efficiency levels. In the literature distance, size and bank diversification attitudes are used as proxy of different bank organization structures, and indirectly of alternative relationships between bank and customers. Several factors – innovation, consolidation and regulation – have recently changed bank organizational structure making banks larger and more complex. Small business lending has also been affected. Technological innovations make easier SMEs evaluation via credit scoring; moreover, consolidation creates the opportunity for larger and more complex financial institutions to interact with SMEs differently than smaller and less complex institutions. Large and complex institutions are usually more distant and characterized by a different and more sophisticated product diversification. The effects of both these aspects on efficiency depend as suggested by Udell (2009) (p. 16) ’on the extent to which hard information about borrower quality is a good substitute for soft information. On the one hand, hard information is quantifiable and easily stored and can be produced and communicated over long distances. […] On the other hand, soft information cannot be easily stored; and it can neither be easily generated over long distances, nor be easily communicated over long distances or within large and complex banking organizations‘ (on this point see also Stein, 2002). As for distance, we refer to the so-called Church Tower Principle (CTP), proposed by Carling and Lundberg (2005, p. 40), affirming that ‘the bank is the church tower and from its outlook it can screen and monitor firms in its proximity.’ Authors refer to this as asymmetric information, which increases in distance. This principle appears to be particularly relevant for the Italian banking system, whose lending service is mainly addressed to SMEs being highly opaque. The distance between the bank headquarter (HQ) and its branches could exacerbate the loan evaluating process, affecting the overall bank efficiency negatively. The rationale is that as the distance between the borrowing firm and the bank loan decision unit increases, the relationship lending weakens and the firm credit evaluation process becomes problematic. Even if relationships between distance and efficiency, at our knowledge, has not been investigated, a large stream of the literature has conversely analysed the relation between organizational structure, distance and lending conditions. As suggested by Alessandrini et al. (2009c, p. 1) ‘technological progress, deregulation, and consolidation have deeply changed the geography of the banking industry in many countries’. In this respect it becomes important to understand the role of functional distance – defined...

We show that performance-sensitive debt (PSD) is used to reduce hold-up problems in repeated lending relationships. Using a large sample of bank loans, we find a more frequent use of PSD if hold-up is more likely, e.g. if a longterm lending relationship exists and the borrower has fewer outside financing alternatives. The use of PSD is less likely in syndicated relationship loans, as hold-up is less important in this market. Finally, we find a substitution effect between the use of PSD and the tightness of financial covenants, which is consistent with PSD reducing hold-up problems caused by the use of covenants.

This paper estimates the exporter premium in bank lending. We examine credit relationships in Germany, covering all loans of more than 1.5 million euro over the period from 2005 to 2010. Having controlled for a wide range of other firm and bank characteristics, our results indicate that exporting firms take out loan s around 15 percent larger than those of non-exporters.

Lo scopo di questo lavoro è quello di esaminare la relazione tra banca locale e impresa in un contesto economico in profondo cambiamento. L’obiettivo è comprendere se e come l’orientamento all’attività di finanziamento delle banche locali (più radicate nel territorio e più vicine ai principi del relationship lending) sia cambiato in seguito allo scoppio della crisi finanziaria.

A puzzling but consistent result in the empirical literature on banking is that firms with close bank ties do not grow faster than bank-independent firms. In this paper, we reconsider the link between relationship lending and firm growth, distinguishing firms by size and expansion/contraction conditions. The idea is that the beneficial effects of relationship lending on information asymmetries can be compensated by other negative capture, risk, and externality effects which make relational banks reluctant to support long-term growth projects of client firms, and that the strength of these compensating effects varies with firm size and health status. We explore the influence of long-lasting bank relationships on employment and asset growth of a large sample of Italian firms. The main finding is that relationship lending hampers the efforts of small firms to increase their size, while it mitigates the negative growth of troubled, medium–large enterprises.

In this paper, we focus on the interconnectedness of banks and the price they pay for liquidity. We assess how the concentration of credit relationships and the position of a bank in the network topology of the system influence the bank's ability to meet its liquidity demand. We use quarterly data of bilateral interbank credit exposures between all German banks from 2000 to 2008 to measure interbank relationships and the network characteristics. We match these data with the bids placed by the individual banks in the European Central Bank's (ECB) weekly repo auctions. The bids measure each bank's willingness to pay for liquidity since they had variable rate tenders with a 'pay-your-bid' price. Controlling for bank characteristics and the daily fulfillment of reserve requirements, we find that banks with a more diversified borrowing structure in the interbank market bid significantly less aggressively and pay a lower price for liquidity in the ECB's main refinancing operations. These findings suggest that incentives to diversify bank liquidity risk dominate the benefits of private information. When the network position of the bank is taken into account, we find that central lenders in the money market bid more aggressively in the auctions.

This paper empirically examines the role of soft information in the competitive interaction between relationship and transaction banks. Soft information can be interpreted as a private signal about the quality of a firm that is observable to a relationship bank, but not to a transaction bank. We show that borrowers self-select to relationship banks depending on whether their privately observed soft information is positive or negative. Competition affects the investment in learning the private signal from firms by relationship banks and transaction banks asymmetrically. Relationship banks invest more; transaction banks invest less in soft information, exacerbating the selection effect. Finally, we show that firms where soft information was important in the lending decision were no more likely to default compared to firms where only financial information was used.

The ex ante theory of collateral states that better informed lenders, such as informal lenders, rely less on collateral. We test this by contrasting the use of collateral between formal and informal lenders in the same market. Indeed, formal lenders rely more often on collateral, controlling for conventional determinants of collateral. Moreover, better information about borrowers has implications within lender groups: first, relationship lending reduces asymmetric information, but only for formal lenders who use collateral less with longer relationship; second, short distance between lender and borrower reduces asymmetric information, mainly for informal lenders who use collateral less at shorter distances.

This paper examines the ex-post performance of small and medium enterprises (SMEs) that obtained small business credit scoring (SBCS) loans by using a unique Japanese firm-bank matched dataset. The ex-post probability of default after the SBCS loan was provided significantly increased for SMEs that obtained an SBCS loan from a transactional lender. Also, the lending attitude of relationship lenders during the recent global financial crisis was more severe if a transactional lender had extended an SBCS loan to a firm. These findings suggest that SBCS loans by a transactional lender are detrimental to a relationship lender’s incentive to monitor SMEs and maintain relationships., 近未来の課題解決を目指した実証的社会科学推進事業

International audience; Using a unique, hand-collected database of 389 small loans granted by a French social bank dealing with genuinely small, informationally opaque businesses (mainly social enterprises), our study highlights the relevance of including soft information (especially on management quality) to improve credit default prediction. Comparing our findings with those of previous studies also reveals that the more opaque the borrower, the higher the predictive value of soft information in comparison with hard. Finally, a cost-benefit analysis shows that including soft information is economically valuable once collection costs have been accounted for, albeit to a moderate extent.

We empirically investigate the effect that relationship lending has on the availability and pricing of interbank liquidity. Our analysis is based on a daily panel of unsecured overnight loans between 1,079 distinct German bank pairs from March 2006 to November 2007, a period that includes the 2007 liquidity crisis that marked the beginning of the 2007/08 global financial crisis. We find that (i) relationship lenders are more likely to provide liquidity to their closest borrowers, (ii) particularly opaque borrowers obtain liquidity at lower rates when borrowing from their relationship lenders, and (iii) during the crisis, relationship lenders provided cheaper loans to their closest borrowers. Our results hold after controlling for search frictions as well as a large set of (time-varying) bank and bank-pair control variables and fixed effects. While we find some indication that lending relationships help banks reduce search frictions in the over-the-counter interbank market, our results establish that bank-pair relationships have a significant impact on interbank credit availability and pricing due to mitigating uncertainty about counterparty credit quality.

The widespread evidence of multiple bank lending relationships in credit markets suggests that firms are interested in setting up a diversity of banking links. However, it is hard to know from the empirical data whether a firm's observed number of lenders is symptomatic of financial constraints or rather a well-designed strategy. By setting up a model and testing it in a controlled laboratory experiment we are able to uncover the conditions favoring multiple versus single lending strategies of borrowers, as well as the probability to get funding from lenders. We find that borrowers adjust the way they signal their trustworthiness according to the experimental design: they do so by choosing a single lending strategy when the asymmetry of informations is high. Multiple lending is therefore strategically chosen by dishonest borrowers. Instead, when relationship building is possible, the single lending choice reinforces the positive effect of repeatedly interacting with the same lender. In this case, multiple lending is related to borrowers' financial constraints. Finally, when information upon borrowers' behavior is made available, lenders are more likely to punish free-riding behaviors than simple default due to project failure.

In this paper we study how access to bank lending during the recent financial crisis differed between family and non-family firms. Our theoretical prediction is that the presence of a family block-holder in the company attenuated the agency conflict in the borrower-lender relation, because of the higher non-monetary cost of default entailed in this type of corporate ownership structure. Because this information is to a large extent soft, we further investigate the interaction between the family firm status and the screening technology adopted by banks. Using highly detailed data referred to Italy, we exploit the change in the credit allocation following Lehman Brothers’ bankruptcy. We find that family firms experienced a contraction in granted credit lower than non-family firms. Results are robust to ex-ante differences between the two types of firms and to bank-specific shocks. In line with our prior, banks that increased the role of soft information in their lending practices reallocated credit towards family firms.

Cette thèse contient trois études sur le fonctionnement des banques.Le premier Chapitre analyse empiriquement comment la capacité d’offrir des emprunts à long terme est influencée par la dimension des intermédiaires financiers.Le deuxième Chapitre analyse, avec un model théorique caractérisé par la présence de soft-budget constraint, ratchet effect et short-termism, comment la pression compétitive influence la capacité des banque de financer le firmes ayant des projets de bonne qualité.Le troisième Chapitre examine, avec un model théorique du type moral hazard common agency, le conflits d'intérêts des banques universelles.Financial intermediaries are recognized to promote the efficiency of resource allocation by mitigating problems of incentives, asymmetric information and contract incompleteness. The role played by financial intermediaries is considered so crucial that these institutions have received all over the world the greatest attention of regulators.Across and within banking sectors it is possible to observe a wide variety of intermediaries. Banks may differ in their size, market power and degree of specialization. This variety raises interesting questions about the features of a well functioning banking sector. These questions have inspired an important body of economic literature which, however, is still inconclusive in many aspects. This dissertation includes three studies intending to contribute in this direction.Chapter 1 will empirically study the willingness of smaller and larger lenders to grant long-term loans which, as credit to SME's, constitute an opaque segment of the credit market. Chapter 2 analyzes, with a theoretical model, the effects of competition on the efficiency of the banking sector when this is characterized by dynamic commitment issues which brings to excessive refinancing of bad quality investments (so called soft-budget constraint) or excessive termination of good ones (ratchet effect and short-termism). Chapter 3 presents a model to investigate to what extent the distortions posed by conflicts of interest in universal banks can be addressed through the provision of appropriate incentive schemes by the different categories of clients., Doctorat en Sciences économiques et de gestion, info:eu-repo/semantics/nonPublished

During the last decades banks have progressively moved towards centralized and hierarchical organizational structures. Therefore, the investigation of the determinants of bank efficiency and relationships with the functional distance between the bank head-quarter and operational units have become increasingly important. This paper extends the literature on bank efficiency examining the impact of different bank business models on the efficiency of the Italian banks, distinguished by size and type over the period 2006-2009. Using a stochastic frontier approach, the intertemporal relationships between bank efficiency and some key variables, as distance and income diversification (used as proxies of different organizational banking models) are investigated. Results suggest that organizational structure significantly affects cost efficiency, being different between bank groups.

Due to opaque information and weak enforcement in emerging loan markets, the need for collateral is high, whereas borrowers lack adequate assets to pledge as collateral. How is this puzzle solved? We find for a representative sample from Northeast Thailand that indeed most loans do not include any tangible assets as collateral. Instead, lenders enforce collateral-free loans through third-party guarantees and relationship lending, but also through modifying loan terms, such as reducing loan size. Guarantees are the relatively most important substitute, they reduce collateral requirements independently of relationship lending and they are more often used by formal financial institutions.

The aim of this study is to confirm the presence of a relationship between the territory and the bank, verifying empirically the effect of the functional distance (headquarters-branches distance) on bank performance. To support this hypothesis we also test the effects that the bank size, the intensity of labour factor, the bank type (and its lending features) have on bank performance. We aim to shed light on the impact of bank size on the link between distance and performance. The analysis is based on a sample of almost 3,000 Italian banks over the period 2005-2008, and demonstrates the existence of a positive relationship between functional distance, foreign control, institutional type of intermediary and bank performance. In the model the control variables used take into account local market competition, relationship lending features and banking business structure. The robustness checks, conducted excluding the outlier observations and using other variables, confirm the negative effect of the functional distance on bank performance and, consequently, the importance of relationship lending to SMEs. Finally, on the basis of these outcomes, some managerial implications are proposed related to the intermediary size.

This paper studies how credit constraints develop over bank relationships. I analyze a unique dataset of matched loan application and loan contract information and measure credit constraints as the ratio of requested to granted loan amounts. I find that the most important determinants of receiving smaller than requested loan amounts are firm age and size at the time of the first interaction between borrower and bank. Over loan sequences, credit constraints decease most pronouncedly in the beginning of relationships and for the initially young and small firms. Moreover, the structure of the dataset allows me to disentangle the demand and supply effects behind these observed credit constraints. I find that the gap between requested and granted loan amounts decreases because both sides converge. If previous credit constraints were large, requested amounts increase more moderately, while granted amounts increase more strongly than in the case of small previous constraints. The findings are a sign of the use of dynamic incentives at the bank side to overcome information problems when contracting repeatedly with opaque borrowers. The results further suggest that, particularly in the beginning of a bank relationship, borrowers learn from their previous experience with credit constraints and adjust their demand accordingly.

This paper examines the role of collateral in the rural credit market of an emerging country. Due to opaque information and weak enforcement, the need for collateral is expected to be high. However, rural households usually lack adequate assets to pledge as collateral. How is this puzzle solved? Using data from Thailand, we find that indeed most loans are provided without any tangible assets as collateral. Lenders can enforce collateral-free loans through third party guarantees and borrower-lender relationships, but also through reducing loan size, reducing duration or increasing the interest rate. We do not find a significant impact of borrowers' wealth and default risk on the use of collateral.

This paper studies how credit constraints develop over bank relationships. I analyze a unique dataset of matched loan application and loan contract information and measure credit constraints as the ratio of requested to granted loan amounts. I find that the most important determinants of receiving smaller than requested loan amounts are firm age and size at the time of the first interaction between borrower and bank. Over loan sequences, credit constraints decease most pronouncedly in the beginning of relationships and for the initially young and small firms. Moreover, the structure of the dataset allows me to disentangle the demand and supply effects behind these observed credit constraints. I find that the gap between requested and granted loan amounts decreases because both sides converge. If previous credit constraints were large, requested amounts increase more moderately, while granted amounts increase more strongly than in the case of small previous constraints. The findings are a sign of the use of dynamic incentives at the bank side to overcome information problems when contracting repeatedly with opaque borrowers. The results further suggest that, particularly in the beginning of a bank relationship, borrowers learn from their previous experience with credit constraints and adjust their demand accordingly.

Recent empirical findings by Elsas (2005) and Degryse and Ongena (2007) document a U-shaped effect of market concentration on relationship lending which cannot be easily accommodated by the investment and strategic theories of relationship lending. In this paper, we suggest that this non-monotonicity can be explained by looking at the organizational structure of local credit markets. We provide evidence that marginal increases in interbank competition are detrimental to relationship lending in markets where large and out-of-market banks are predominant. On the contrary, where relational-based lending technologies are al-ready widely in use in the market by a large group of small mutual banks, an increase in competition may drive banks to further cultivate their extensive ties with customers.