The Prime Premium : Is Relationship Banking Too Costly for Some?
AbstractThe most important determinant of bank loan pricing is not borrower risk or other conventional variable but whether the interest rate is pegged to the Prime Rate or to a market index such as Livor. Controlling for the difference in level among such benchmarks, and for many other variables explanatory of bank loan pricing, Prime-based borrowers paid 140-150 basis points more on average during 1990-1995.
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Bibliographic InfoPaper provided by Columbia - Graduate School of Business in its series Papers with number 96-22.
Length: 29 pages
Date of creation: 1996
Date of revision:
Contact details of provider:
Postal: U.S.A.; COLUMBIA UNIVERSITY, GRADUATE SCHOOL OF BUSINESS, PAINE WEBBER , New York, NY 10027 U.S.A
Phone: (212) 854-5553
Web page: http://www.columbia.edu/cu/business/
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BANKS ; LOANS ; INTEREST RATE;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
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- Charles Calomiris & Thanavut Pornrojnangkool, 2009.
"Relationship Banking and the Pricing of Financial Services,"
Journal of Financial Services Research, Springer,
Springer, vol. 35(3), pages 189-224, June.
- Charles Calomiris & Thanavut Pornrojnangkool, 2006. "Relationship Banking and the Pricing of Financial Services," NBER Working Papers 12622, National Bureau of Economic Research, Inc.
- Hubbard, R Glenn & Kuttner, Kenneth N & Palia, Darius N, 2002.
"Are There Bank Effects in Borrowers' Costs of Funds? Evidence from a Matched Sample of Borrowers and Banks,"
The Journal of Business, University of Chicago Press,
University of Chicago Press, vol. 75(4), pages 559-81, October.
- R. Glenn Hubbard & Kenneth N. Kuttner & Darius N. Palia, 1999. "Are there "bank effects" in borrowers' costs of funds? Evidence from a matched sample of borrowers and banks," Staff Reports, Federal Reserve Bank of New York 78, Federal Reserve Bank of New York.
- Charles W. Calomiris & Thanavut Pornrojnangkool, 2005. "Monopoly-Creating Bank Consolidation? The Merger of Fleet and BankBoston," NBER Working Papers 11351, National Bureau of Economic Research, Inc.
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