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Deconstructing relationship banking

  • Xavier Freixas

    (Universitat Pompeu Fabra)

During the last decade the concept of relationship banking has been forged in the theory of banking to reflect the sharing of private information between a bank and its clients and the benefits of a continuing relationship. A number of theoretical contributions have examined the implications of relationship banking on the banking industry market structure, but their results are sometimes contradictory. This paper constitutes an analytical survey that examines relationship banking by means of a simple basic model and studies the implications of relationship banking on the pricing of loans, as well as its effect on the degree of competition in the banking industry.

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Article provided by Fundación SEPI in its journal Investigaciones Economicas.

Volume (Year): 29 (2005)
Issue (Month): 1 (January)
Pages: 3-31

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Handle: RePEc:iec:inveco:v:29:y:2005:i:1:p:3-31
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