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How banks construct and manage risk: A sociological study of small firm lending in Britain and Germany

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  • Lane, Christel
  • Quack, Sigrid

Abstract

This paper analyses the role of banks in financing SMEs in Britain and Germany. It applies a sociological institutionalist approach to understand how banks construct and manage risk, relating to SME business. The empirical analysis is based on the results of a comparative survey of a sample of British and German banks and also refers to statistical material produced by the banks themselves. The paper concludes that, even though bank-firm relations are still deeply embedded in national institutional frameworks, some tendencies towards convergence can also be observed, particularly among commercial banks from the two countries. These flow from both internationalisation and from the political influence of the EU.

Suggested Citation

  • Lane, Christel & Quack, Sigrid, 2002. "How banks construct and manage risk: A sociological study of small firm lending in Britain and Germany," Discussion Papers, Research Unit: Organization and Employment FS I 02-101, WZB Berlin Social Science Center.
    • Handle: RePEc:zbw:wzboem:fsi02101
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    References listed on IDEAS

    as
    1. Christel Lane, 1995. "Industry and Society in Europe," Books, Edward Elgar Publishing, number 272.
    2. Soskice, David & Hancké, Bob, 1996. "Von der Konstruktion von Industrienormen zur Organisation der Berufsausbildung: Eine vergleichende Analyse am Beispiel von Großbritannien, Deutschland, Japan und Frankreich," Discussion Papers, Research Unit: Economic Change and Employment FS I 96-310, WZB Berlin Social Science Center.
    3. Sigrid Quack & Swen Hildebrandt, 1997. "Bank Finance for Small and Medium-sized Enterprises in Germany and France," Palgrave Macmillan Books, in: Glenn Morgan & David Knights (ed.), Regulation and Deregulation in European Financial Services, chapter 5, pages 105-132, Palgrave Macmillan.
    4. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    5. Braithwaite,John & Drahos,Peter, 2000. "Global Business Regulation," Cambridge Books, Cambridge University Press, number 9780521784993.
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    1. Preunkert, Jenny, 2020. "Primary dealer systems in the European Union," MaxPo Discussion Paper Series 20/1, Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo).
    2. Sandar Win, 2018. "What are the possible future research directions for bank’s credit risk assessment research? A systematic review of literature," International Economics and Economic Policy, Springer, vol. 15(4), pages 743-759, October.

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