Can Relationship Banking Survive Competition?
Top Cited Papers
- 1 April 2000
- journal article
- research article
- Published by Wiley in The Journal of Finance
- Vol. 55 (2) , 679-713
- https://doi.org/10.1111/0022-1082.00223
Abstract
How will banks evolve as competition increases from other banks and from the capital market? Will banks become more like capital market underwriters and offer passive transaction loans or return to their roots as relationship lending experts? These are the questions we address. Our key result is that as interbank competition increases, banks make more relationship loans, but each has lower added value for borrowers. Capital market competition reduces relationship lending (and bank lending shrinks), but each relationship loan has greater added value for borrowers. In both cases, welfare increases for some borrowers but not necessarily for all.Keywords
All Related Versions
This publication has 31 references indexed in Scilit:
- The market for information and the origin of financial intermediationPublished by Elsevier ,2004
- Deposit Liquidity and Bank MonitoringJournal of Financial Intermediation, 1998
- Bank Loan Commitment Contracts: Data, Theory, and TestsJournal of Money, Credit and Banking, 1997
- Proprietary Information, Financial Intermediation, and Research IncentivesJournal of Financial Intermediation, 1995
- Bank Loan Commitments and Corporate LeverageJournal of Financial Intermediation, 1995
- Delegated Monitoring and Bank Structure in a Finite EconomyJournal of Financial Intermediation, 1995
- Information Disclosure Costs and the Choice of Financing SourceJournal of Financial Intermediation, 1995
- Contemporary Banking TheoryJournal of Financial Intermediation, 1993
- Banking, financial intermediation and corporate financePublished by Cambridge University Press (CUP) ,1991
- Monopolistic Competition with Outside GoodsThe Bell Journal of Economics, 1979