IDEAS home Printed from https://ideas.repec.org/a/ris/jofitr/1463.html
   My bibliography  Save this article

The Organization of Lending and the Use of Credit Scoring Techniques in Italian Banks

Author

Listed:
  • Albareto, Giorgio

    () (Bank of Italy)

  • Benvenuti, Michele

    () (Bank of Italy)

  • Mocetti, Sauro

    () (Bank of Italy)

  • Pagnini, Marcello

    () (Bank of Italy)

  • Rossi, Paola

    () (Bank of Italy)

Abstract

This paper examines the results of a survey carried out in 2007 by the Bank of Italy concerning different characteristics of the organization of lending activities. Between 2003 and 2006 the physical distance between the headquarters and the branches increased, the limits to the decision-making process of loan officers were eased, their mobility raised, and the use of economic incentives to reward their activity expanded. The huge heterogeneity in organizational structures persists even within relatively homogenous size classes. The diffusion of statistical models to assess credit risk (scoring) accelerated recently particularly among large banks, boosted by the new Basel Capital Accord. Scoring is either very important or determinant in decisions on credit extension while it is rarely influential in setting interest rates, the duration of the credit, and the amount and type of collateral required. The survey shows that banks have been progressively adapting their organizational structure in order to incorporate the credit scoring tools into their lending processes.

Suggested Citation

  • Albareto, Giorgio & Benvenuti, Michele & Mocetti, Sauro & Pagnini, Marcello & Rossi, Paola, 2011. "The Organization of Lending and the Use of Credit Scoring Techniques in Italian Banks," Journal of Financial Transformation, Capco Institute, vol. 32, pages 143-168.
  • Handle: RePEc:ris:jofitr:1463
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Silvia Del Prete & Stefano Federico, 2014. "Trade and finance: is there more than just 'trade finance'? Evidence from matched bank-firm data," Temi di discussione (Economic working papers) 948, Bank of Italy, Economic Research and International Relations Area.
    2. Gregory S. Crawford & Nicola Pavanini & Fabiano Schivardi, 2018. "Asymmetric Information and Imperfect Competition in Lending Markets," American Economic Review, American Economic Association, vol. 108(7), pages 1659-1701, July.
    3. Giorgio Albareto & Roberto Felici & Enrico Sette, 2016. "Does credit scoring improve the selection of borrowers and credit quality?," Temi di discussione (Economic working papers) 1090, Bank of Italy, Economic Research and International Relations Area.
    4. repec:eee:jbfina:v:82:y:2017:i:c:p:165-179 is not listed on IDEAS
    5. Silvia Del Prete & Marcello Pagnini & Paola Rossi & Valerio Vacca, 2017. "Lending organization and credit supply during the 2008-09 crisis," Temi di discussione (Economic working papers) 1108, Bank of Italy, Economic Research and International Relations Area.
    6. Stefano Filomeni & Gregory F. Udell & Alberto Zazzaro, 2016. "Hardening Soft Information: How Far Has Technology Taken Us?," CSEF Working Papers 455, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    7. repec:kap:jfsres:v:51:y:2017:i:3:d:10.1007_s10693-016-0244-3 is not listed on IDEAS
    8. repec:bla:ecnote:v:46:y:2017:i:2:p:269-306 is not listed on IDEAS
    9. Leandro D’Aurizio & Tommaso Oliviero & Livio Romano, 2012. "Family firms and the agency cost of debt: The role of soft information during a crisis," Economics Working Papers ECO2012/22, European University Institute.
    10. Cenni, Stefano & Monferrà, Stefano & Salotti, Valentina & Sangiorgi, Marco & Torluccio, Giuseppe, 2015. "Credit rationing and relationship lending. Does firm size matter?," Journal of Banking & Finance, Elsevier, vol. 53(C), pages 249-265.
    11. Sauro Mocetti & Marcello Pagnini & Enrico Sette, 2017. "Information Technology and Banking Organization," Journal of Financial Services Research, Springer;Western Finance Association, vol. 51(3), pages 313-338, June.
    12. Beltratti, Andrea & Benetton, Matteo & Gavazza, Alessandro, 2017. "The role of prepayment penalties in mortgage loans," Journal of Banking & Finance, Elsevier, vol. 82(C), pages 165-179.
    13. Masazumi Hattori & Kohei Shintani & Hirofumi Uchida, 2012. "Authority and Soft Information Production within a Bank Organization," IMES Discussion Paper Series 12-E-07, Institute for Monetary and Economic Studies, Bank of Japan.
    14. Crawfordy, Gregory S & Pavaniniz, Nicola & Schivardi, Fabiano, 2013. "Asymmetric Information and Imperfect Competition in the Loan Market," CAGE Online Working Paper Series 167, Competitive Advantage in the Global Economy (CAGE).
    15. Marcello Pagnini & Silvia Del Prete & Paola Rossi & Valerio Vacca, 2013. "Lending Organization and Credit Supply During the Crisis," ERSA conference papers ersa13p673, European Regional Science Association.
    16. repec:bla:ecnote:v:46:y:2017:i:2:p:207-236 is not listed on IDEAS
    17. Battistin, Erich & Graziano, Clara & Parigi, Bruno M., 2012. "Connections and performance in bankers’ turnover," European Economic Review, Elsevier, vol. 56(3), pages 470-487.
    18. repec:bla:ecnote:v:46:y:2017:i:2:p:237-268 is not listed on IDEAS
    19. repec:kap:jfsres:v:51:y:2017:i:3:d:10.1007_s10693-016-0250-5 is not listed on IDEAS
    20. repec:kap:sbusec:v:49:y:2017:i:2:d:10.1007_s11187-017-9838-x is not listed on IDEAS

    More about this item

    Keywords

    banking organization; distance; delegation; credit scoring; relationship lending;

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

    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:ris:jofitr:1463. 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: (Prof. Shahin Shojai). General contact details of provider: http://www.capco.com/ .

    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.

    We have no references for this item. You can help adding them by using 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.