Research output: Contribution in Book/Report/Proceedings - With ISBN/ISSN › Chapter
Research output: Contribution in Book/Report/Proceedings - With ISBN/ISSN › Chapter
}
TY - CHAP
T1 - Bank-firm relationships
T2 - a review of the implications for firms and banks in normal and crisis times
AU - Ioannidou, Vasso
AU - Degryse, Hans
AU - Ongena, Steven
PY - 2015
Y1 - 2015
N2 - Banks are important providers of external finance to firms. In order to solve asymmetric information problems, firms and banks often engage in bank-firm relationships. Relationship banking occurs when a bank and a borrower enter multiple mutual interactions and both parties invest in obtaining some counterparty specific information, binding bank and firm, to a certain degree, to each other. This chapter starts with a discussion of reasons for having exclusive versus non-exclusive relationships. It provides a concise overview on the determinants of the number and intensity of bank-firm relationships, and reviews how relationship banking generates costs and benefits for both banks and firms. We show that on average bank-firm relationships generate value for both. The costs and benefits of bank-firm relationships, however, vary substantially with whether an economy is in normal or crisis times
AB - Banks are important providers of external finance to firms. In order to solve asymmetric information problems, firms and banks often engage in bank-firm relationships. Relationship banking occurs when a bank and a borrower enter multiple mutual interactions and both parties invest in obtaining some counterparty specific information, binding bank and firm, to a certain degree, to each other. This chapter starts with a discussion of reasons for having exclusive versus non-exclusive relationships. It provides a concise overview on the determinants of the number and intensity of bank-firm relationships, and reviews how relationship banking generates costs and benefits for both banks and firms. We show that on average bank-firm relationships generate value for both. The costs and benefits of bank-firm relationships, however, vary substantially with whether an economy is in normal or crisis times
M3 - Chapter
BT - The Economics of Network
A2 - Watanabe, Tsutomu
A2 - Uesugi, Iichiro
A2 - Ono , Arito
PB - Springer Japan 2015
ER -