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The joint size and ownership specialization in banks' lending

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  • Javier Delgado

    ()
    (Banco de España)

  • Vicente Salas-Fumás

    ()
    (Banco de España
    Universidad de Zaragoza)

  • Jesús Saurina

    ()
    (Banco de España)

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    Abstract

    In this paper we study the specialization of Spanish banks along two intertwined dimensions: size and ownership form. We find some interesting results at odds with the existing empirical literature. As commercial banks increase their size, they lend more to large borrowers but that is not the case for the largest banks. For savings banks, the larger the size the more likely is the lending to small borrowers. Moreover, we find evidence that larger commercial banks are more willing to lend to low credit quality borrowers than medium size banks, while the opposite is true among savings banks. Banks' specialization in lending to business firms seems to go across the reputation considerations, risk shifting behavior and lending technologies most often considered in the literature.

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    File URL: http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/06/Fic/dt0606e.pdf
    File Function: First version, March 2006
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    Bibliographic Info

    Paper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 0606.

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    Length: 40 pages
    Date of creation: Mar 2006
    Date of revision:
    Handle: RePEc:bde:wpaper:0606

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    Keywords: bank specialization; transactional lending; relational lending; ownership form;

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    Cited by:
    1. Jesús Saurina & Carlos Trucharte, 2007. "An assessment of Basel II procyclicality in mortgage portfolios," Banco de Espa�a Working Papers 0712, Banco de Espa�a.

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