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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)

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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