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A main bank approach to financial contracting


  • Tribo Gine, José Antonio
  • García Cestona, Miguel A.


This paper analyzes the costs and benefits of using a Main Bank (MB) as a financial provider. Several banks lend resources to a particular firm but only one monitors and remains responsible to other participants. These inside banks act as fund providers for the project, exchanging roles by the time other projects are considered. We show how, depending on firms quality and the banks skills to monitor, an MB-contract outperforms other arrangements. This type of financial relationship is particularly prominent in the Japanese marketplace, and in spite of recent setbacks, we believe sorne of its features have the potential to be implemented in other marketplaces.

Suggested Citation

  • Tribo Gine, José Antonio & García Cestona, Miguel A., 1998. "A main bank approach to financial contracting," DEE - Working Papers. Business Economics. WB 6543, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
  • Handle: RePEc:cte:wbrepe:6543

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    Financial contract;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory


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