Sorry, We're Closed: Loan Conditions When Bank Branches Close and Firms Transfer to Another Bank

Diana Bonfim, Gil Nogueira and Steven Ongena

Working Papers from Banco de Portugal, Economics and Research Department

Abstract: We study loan conditions when bank branches close and firms subsequently transfer to a branch of another bank in the vicinity. Such transfer loans allow us for the first time to observe the conditions granted when banks pool-price new applicants. Consistent with recent theoretical work on hold up in bank-firm relationships we find that transfer loans do not receive the discount in loan rates that prevails when firms otherwise switch banks. We hereby critically augment recent empirical evidence on dynamic cycles in loan rates.

JEL-codes: G21 L11 L14 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-ban and nep-bec
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:ptu:wpaper:w201607

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