Big Techs vs Banks

Leonardo Gambacorta, Fahad Khalil and Bruno Maria Parigi

No 1037, BIS Working Papers from Bank for International Settlements

Abstract: We study an economy in which large technology companies, big techs, provide credit to firms operating on their platforms. We focus on two advantages that big techs have with respect to banks: better information on their clients and better enforcement of credit repayment since big techs can exclude a defaulting firm from their ecosystem. While big techs have both superior enforcement and complete and private information of the firm type big techs can encroach on banks' turf only if they guarantee some privacy to firms by tempering their drive to collect information about firm characteristics and leaving some rents to them. The way big techs share information i.e. by providing information publicly or in a private way entails different outcomes in terms of efficiency.

Keywords: big techs; credit markets; privacy; information sharing (search for similar items in EconPapers)
JEL-codes: E51 G23 O31 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2022-08
New Economics Papers: this item is included in nep-ban, nep-fdg, nep-law, nep-pay and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.bis.org/publ/work1037.pdf Full PDF document (application/pdf)
https://www.bis.org/publ/work1037.htm (text/html)

Related works:
Working Paper: Big Techs vs Banks (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:1037

Access Statistics for this paper

More papers in BIS Working Papers from Bank for International Settlements Contact information at EDIRC.
Bibliographic data for series maintained by Martin Fessler ().