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Soft Information and Default Prediction in Cooperative and Social Banks

  • Simon Cornée

    (CREM UMR CNRS 6211, University of Rennes 1, and CERMi, France)

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    In this paper, to begin with, we define soft information as qualitative, subjective information produced by banks through the establishment of long-term lending relationships. We then highlight the importance of soft information for cooperative and social banks in the screening, pricing and monitoring of their borrowers as a result of their institutional features (governance, values, etc.) and the specificities of their clientele. We finally emphasise the value of qualitative (economic, social and/or environmental) factors stemming from the production of soft information in predicting credit default events.

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    Paper provided by Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS in its series Economics Working Paper Archive (University of Rennes 1 & University of Caen) with number 201402.

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    Date of creation: Feb 2014
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    Handle: RePEc:tut:cremwp:201402
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