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Guarantees and Bank Loan Interest Rates in Italian Small-Sized Firms

In: Small Businesses in the Aftermath of the Crisis

Author

Listed:
  • Giorgio Calcagnini

    (Università di Urbino “Carlo Bo”)

  • Fabio Farabullini

    (Bank of Italy)

  • Germana Giombini

    (Università di Urbino “Carlo Bo”)

Abstract

The paper analyzes the role of guarantees on interest rates before and during the recent financial crisis in small-sized firm financing. The novelty of this work is the distinction between real and personal guarantees, and the potential different role they could have played in the bank-borrower relationship during the recent financial crisis. This paper draws from individual Italian bank and producer households data taken from the Central Credit Register at the Bank of Italy over the period 2006–2009. Our analysis demonstrates that collateral affects the cost of credit of small business by systematically reducing the spread of secured loans, once we control for borrower and loan risk. Personal guarantees reduce the loan interest rate only during the crisis.

Suggested Citation

  • Giorgio Calcagnini & Fabio Farabullini & Germana Giombini, 2012. "Guarantees and Bank Loan Interest Rates in Italian Small-Sized Firms," Contributions to Economics, in: Giorgio Calcagnini & Ilario Favaretto (ed.), Small Businesses in the Aftermath of the Crisis, edition 127, pages 229-251, Springer.
    • Handle: RePEc:spr:conchp:978-3-7908-2852-8_12
    DOI: 10.1007/978-3-7908-2852-8_12
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    Citations

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    Cited by:

    1. Giorgio Calcagnini & Fabio Farabullini & Germana Giombini, 2012. "The impact of the recent financial crisis on bank loan interest rates and guarantees," Working Papers 1202, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2012.
    2. Shuanglian Chen & Zhehao Huang & Benjamin M. Drakeford & Pierre Failler, 2019. "Lending Interest Rate, Loaning Scale, and Government Subsidy Scale in Green Innovation," Energies, MDPI, vol. 12(23), pages 1-22, November.
    3. Giorgio Calcagnini & Germana Giombini & Elisa Lenti, 2012. "Gender differences in bank loan access," Working Papers 1212, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2012.

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