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Information technology and banking organization


  • Sauro Mocetti

    () (Bank of Italy)

  • Marcello Pagnini

    () (Bank of Italy)

  • Enrico Sette

    () (Bank of Italy)


We investigate the impact of information and communication technologies (ICT) on local loan officers� autonomy in small business lending. We derive a simple agency model of the interaction between a local branch manager and the headquarters, which yields an estimable equation for the optimal delegation of authority. Using a unique and specifically tailored dataset including about 300 Italian banks, we show that banks equipped with more ICT capital and resorting to credit scoring delegate more decision-making power to their local branch managers. These results are robust to many additional controls, including instrumental variable estimation. The effects on decentralization are strengthened for those banks that jointly hold higher ICT capital endowments and adopt credit scoring.

Suggested Citation

  • Sauro Mocetti & Marcello Pagnini & Enrico Sette, 2010. "Information technology and banking organization," Temi di discussione (Economic working papers) 752, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:wptemi:td_752_10

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    Cited by:

    1. Zeno Rotondi, 2013. "Relationship banking and organizational models: a new structure for UniCredit Group in Italy," BANCARIA, Bancaria Editrice, vol. 4, pages 15-23, April.
    2. Giacinto Micucci & Paola Rossi, 2010. "Debt restructuring and the role of lending technologies," Temi di discussione (Economic working papers) 763, Bank of Italy, Economic Research and International Relations Area.
    3. Bartoli, Francesca & Ferri, Giovanni & Murro, Pierluigi & Rotondi, Zeno, 2013. "SME financing and the choice of lending technology in Italy: Complementarity or substitutability?," Journal of Banking & Finance, Elsevier, vol. 37(12), pages 5476-5485.
    4. 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.
    5. 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.
    6. repec:kap:jfsres:v:51:y:2017:i:3:d:10.1007_s10693-016-0250-5 is not listed on IDEAS
    7. Stefano Filomeni & Gregory F. Udell & Alberto Zazzaro, 2016. "Hardening Soft Information: How Far Has Technology Taken Us?," Mo.Fi.R. Working Papers 121, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    8. Cotugno, Matteo & Monferrà, Stefano & Sampagnaro, Gabriele, 2013. "Relationship lending, hierarchical distance and credit tightening: Evidence from the financial crisis," Journal of Banking & Finance, Elsevier, vol. 37(5), pages 1372-1385.
    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. Ferri, Giovanni & Kalmi, Panu & Kerola, Eeva, 2014. "Does bank ownership affect lending behavior? Evidence from the Euro area," Journal of Banking & Finance, Elsevier, vol. 48(C), pages 194-209.

    More about this item


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

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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