Soft information and loan supply crisis. Evidence from the credit files of a large bank
AbstractUsing a large database built from the credit files of UniCredit we focus on loans to small businesses at the peak of the crisis. We study the determinants of the worsening of financial tension up to March 2009 for those customers experiencing (or close to) financial tension already at the end of December 2008. We find that, controlling for internal ratings, financial tension less likely worsened for the customers enjoying a longer-term relationship. This evidence suggests that during the crisis this large bank used soft information to shift its loan supply toward borrowers with lower ex ante asymmetries of information.
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Bibliographic InfoArticle provided by Istituto di Cultura Bancaria Francesco Parrillo in its journal Rivista Bancaria - Minerva Bancaria.
Volume (Year): (2011)
Issue (Month): 5-6 (november)
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financial crisis; bank-firm relationships; asymmetric information; soft information; small business finance;
Find related papers by JEL classification:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
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