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


  • 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)


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 143-158.
  • Handle: RePEc:ris:jofitr:1520

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    References listed on IDEAS

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

    Cited by:

    1. Crawford, Gregory S. & Pavanini, Nicola & Schivardi, Fabiano, 2015. "Asymmetric Information and Imperfect Competition in Lending Markets," CAGE Online Working Paper Series 227, Competitive Advantage in the Global Economy (CAGE).
    2. 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.
    3. 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.
    4. repec:bla:ecnote:v:46:y:2017:i:2:p:269-306 is not listed on IDEAS
    5. 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.
    6. 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.
    7. 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.
    8. 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).
    9. 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.
    10. repec:bla:ecnote:v:46:y:2017:i:2:p:207-236 is not listed on IDEAS
    11. 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.
    12. repec:eee:jbfina:v:82:y:2017:i:c:p:165-179 is not listed on IDEAS
    13. 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.
    14. 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.
    15. 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.
    16. Battistin, Erich & Graziano, Clara & Parigi, Bruno M., 2012. "Connections and performance in bankers’ turnover," European Economic Review, Elsevier, vol. 56(3), pages 470-487.
    17. repec:bla:ecnote:v:46:y:2017:i:2:p:237-268 is not listed on IDEAS
    18. repec:kap:jfsres:v:51:y:2017:i:3:d:10.1007_s10693-016-0250-5 is not listed on IDEAS
    19. 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


    banking organization; delegation; distance; credit scoring; local branch manager; small business lending;

    JEL classification:

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


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