IDEAS home Printed from https://ideas.repec.org/a/mgt/youmgt/v7y2009i3p307-326.html
   My bibliography  Save this article

Risk and Efficiency in Credit Concession: A Case Study in Portugal

Author

Listed:
  • Carlos Arriaga

    (School of Economics and Management, University of Minho, Portugal)

  • Luis Miranda

    (School of Economics and Management, University of Minho, Portugal)

Abstract

The relationship between banks and customers has contributed to several theories in banking economics. The quality of the credit is crucial for banks. Banks classify the risk through quantitative and qualitative indicators. Quantitative indicators are much used by banks, but qualitative indicators are also considered in credit risk evaluation. Taken together, they contribute to increase efficiency and decrease doubtful credit. Several issues arise in order to understand if risk evaluation affects the efficiency of the banking sector or if it affects the bank customer relationship. We wish to analyse some quantitative and qualitative indicators used by the Portuguese banking system. Despite the reputation of a client being a very important qualitative indicator, it is not enough to determine a classification of low risk.

Suggested Citation

  • Carlos Arriaga & Luis Miranda, 2009. "Risk and Efficiency in Credit Concession: A Case Study in Portugal," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 7(3), pages 307-326.
  • Handle: RePEc:mgt:youmgt:v:7:y:2009:i:3:p:307-326
    as

    Download full text from publisher

    File URL: http://www.fm-kp.si/zalozba/ISSN/1581-6311/7_307-326.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Cheolbeom Park & Thomas Bishop, 2004. "Precautionary Saving, Borrowing Constraints, and Fiscal Policy," Econometric Society 2004 Far Eastern Meetings 706, Econometric Society.
    2. Diamond, Douglas W, 1989. "Reputation Acquisition in Debt Markets," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 828-862, August.
    3. Gorton, G. & Khan, J., 1992. "The Design of Bank Loan Contracts, Collateral, and Renegociation," RCER Working Papers 327, University of Rochester - Center for Economic Research (RCER).
    4. Tullio Jappelli & Marco Pagano, 2000. "Information Sharing in Credit Markets: The European Experience," CSEF Working Papers 35, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    5. Michal Brzoza-Brzezina, 2005. "Lending Booms in Europe’s Periphery: South-Western Lessons for Central-Eastern Members," Macroeconomics 0502002, EconWPA.
    6. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    7. Cresenta Fernando & Atreya Chakraborty & Rajiv Mallick, 2002. "The Importance of Being Known: Relationship Banking and Credit Limits," Finance 0209007, EconWPA.
    8. Mark M. Spiegel, 2004. "Monetary and financial integration: evidence from Portuguese borrowing patterns," Working Paper Series 2004-07, Federal Reserve Bank of San Francisco.
    9. Canals, Jordi, 1997. "Universal Banking: International Comparisons and Theoretical Perspectives," OUP Catalogue, Oxford University Press, number 9780198775058.
    10. Mihnea-Stefan Mihai, 2003. "Stochastics for the worst case: distributions and risk measures for minimal returns," Risk and Insurance 0305001, EconWPA.
    11. Stiglitz, Joseph E, 1985. "Credit Markets and the Control of Capital," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 17(2), pages 133-152, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    credit; banks; bankruptcy; risk;

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mgt:youmgt:v:7:y:2009:i:3:p:307-326. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alen Jezovnik). General contact details of provider: http://edirc.repec.org/data/fmkupsi.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.