The Credit Relationship Between Banks And Companies And Its Effects On The Real Economy
Among the relationships between companies and the financial - banking market representatives, those which are determinate by the lending activity hold a special place. Despite of various alternatives to mobilize the necessary funds to cover the capital needs arising from the current or investment activity, bank loans are the main source of funding for most of the companies. This dominance is assured by the benefits that a bank loan offers to companies and which influence directly and positively their economic and financial situation. Of course there are a number of risks assumed by the company when calling to bank financing, risks which can affect negatively their business if it occurs. Given the important role that companies play in generating of the real flows in the economy, all these positive or negative effects directly impact on the quality of economic and social life at the macro level. For this reason it is very important that between the bank and the company to be always a good communication and transparency in the information requested or offered, and the collaboration between these two types of organizations to carry on a partnership basis.
References listed on IDEAS
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- Martin Brown & Christian Zehnder, 2007.
"Credit Reporting, Relationship Banking, and Loan Repayment,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 39(8), pages 1883-1918, December.
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- Lookman, Aziz A., 2009. "Bank borrowing and corporate risk management," Journal of Financial Intermediation, Elsevier, vol. 18(4), pages 632-649, October.
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