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Deconstructing relationship banking

Author

Listed:
  • Xavier Freixas

    (Universitat Pompeu Fabra)

Abstract

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.

Suggested Citation

  • Xavier Freixas, 2005. "Deconstructing relationship banking," Investigaciones Economicas, Fundación SEPI, vol. 29(1), pages 3-31, January.
  • Handle: RePEc:iec:inveco:v:29:y:2005:i:1:p:3-31
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    References listed on IDEAS

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    Cited by:

    1. Giannetti, Caterina, 2012. "Relationship lending and firm innovativeness," Journal of Empirical Finance, Elsevier, vol. 19(5), pages 762-781.
    2. Belanger, Gilles, 2014. "Interest Rates Rigidities and the Fisher Equation," MPRA Paper 54705, University Library of Munich, Germany.
    3. Verónica Balzarotti & Alejandra Anastasi, 2013. "Does Competition for Novice Borrowers Hurt Access to Finance? An Analysis in a Context of High Risk and Low Outreach," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(69), pages 101-149, December.
    4. Bentolila, Samuel & Jansen, Marcel & Jiménez, Gabriel & Ruano, Sonia, 2013. "When Credit Dries Up: Job Losses in the Great Recession," IZA Discussion Papers 7807, Institute for the Study of Labor (IZA).
    5. Afsheen Abrar & Attiya Y Javaid, 2016. "The Impact of Capital Structure on the Profitability of Microfinance Institutions," South Asian Journal of Management Sciences (SAJMS), Iqra University, Iqra University, vol. 10(1), pages 21-37, Spring.
    6. Stefania Cosci & Valentina Meliciani & Valentina Sabato, 2015. "The Role of Banks as Producers of Information: Can It Survive Competition and Cross-Selling Incentives?," Review of Economics & Finance, Better Advances Press, Canada, vol. 5, pages 60-77, November.
    7. repec:eee:riibaf:v:42:y:2017:i:c:p:532-543 is not listed on IDEAS
    8. Goddard, John & Molyneux, Philip & Wilson, John O.S. & Tavakoli, Manouche, 2007. "European banking: An overview," Journal of Banking & Finance, Elsevier, vol. 31(7), pages 1911-1935, July.
    9. Cristi SPULBAR & Mihai NITOI & Lucian ANGHEL, 2015. "Efficiency In Cooperative Banks And Savings Banks : A Stochastic Frontier Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 5-21, March.
    10. Degryse, Hans & Ongena, Steven, 2007. "The impact of competition on bank orientation," Journal of Financial Intermediation, Elsevier, vol. 16(3), pages 399-424, July.
    11. Köhler, Matthias, 2015. "Which banks are more risky? The impact of business models on bank stability," Journal of Financial Stability, Elsevier, vol. 16(C), pages 195-212.
    12. Cardone Riportella, Clara & Casasola, María José & Samartín Sáenz, Margarita, 2005. "Do banking relationships improve credit conditions for Spanish SMEs?," DEE - Working Papers. Business Economics. WB wb052806, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    13. Antje Brunner & Jan Pieter Krahnen, 2013. "Hold-up in multiple banking: evidence from SME lending," International Journal of Banking, Accounting and Finance, Inderscience Enterprises Ltd, vol. 5(1/2), pages 78-101.
    14. Burcu Aydin & Deniz Igan, 2012. "Bank Lending in Turkey: Effects of Monetary and Fiscal Policies," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(5), pages 78-104, September.
    15. Cosci Stefania & Meliciani Valentina, 2007. "The role of screening and cross-selling in bank-firm relationships," wp.comunite 0033, Department of Communication, University of Teramo.
    16. Süer, Ömür & Levent, Haluk & Şen, Süleyman, 2016. "Foreign entry and the Turkish banking system in 2000s," The North American Journal of Economics and Finance, Elsevier, vol. 37(C), pages 420-435.
    17. Burcu Aydin & Deniz Igan, 2012. "Bank Lending in Turkey: Effects of Monetary and Fiscal Policies," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 48(5), pages 78-104, September.
    18. Goddard, John & McKillop, Donal & Wilson, John O.S., 2008. "The diversification and financial performance of US credit unions," Journal of Banking & Finance, Elsevier, vol. 32(9), pages 1836-1849, September.
    19. repec:rom:mancon:v:11:y:2017:i:1:p:652-659 is not listed on IDEAS
    20. Hetland, Ove Rein & Mjøs, Aksel, 2011. "Using Bank Mergers and Acquisitions to Understand Lending Relationships," Discussion Papers 2011/13, Norwegian School of Economics, Department of Business and Management Science.

    More about this item

    Keywords

    Relationship banking; competition; market structure;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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