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Do bank hierarchies affect the use of guarantees?

Author

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  • Bacchiocchi, Andrea
  • Calcagnini, Giorgio
  • Giombini, Germana

Abstract

This paper studies how bank managers’ hierarchy influences guarantee use. Analyzing 17,900 Italian loan contracts, we show lower-level managers mitigate information asymmetries via relationship lending, while higher-level managers rely on quantitative data, increasing guarantee requirements. Results remain robust across subsamples.

Suggested Citation

  • Bacchiocchi, Andrea & Calcagnini, Giorgio & Giombini, Germana, 2025. "Do bank hierarchies affect the use of guarantees?," Economics Letters, Elsevier, vol. 257(C).
    • Handle: RePEc:eee:ecolet:v:257:y:2025:i:c:s0165176525004896
    DOI: 10.1016/j.econlet.2025.112652
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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