Soft Information and Default Prediction in Cooperative and Social Banks

Simon Cornee

No 14-005, Working Papers CEB from ULB -- Universite Libre de Bruxelles

Abstract: 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.

Keywords: Relationship Lending; Soft Information; Credit Rating; Cooperative and Social Banking (search for similar items in EconPapers)
JEL-codes: G21 L22 M21 P13 (search for similar items in EconPapers)
Pages: 38 p.
Date: 2014-02-12
New Economics Papers: this item is included in nep-ban, nep-cfn and nep-cta
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Working Paper: Soft Information and Default Prediction in Cooperative and Social Banks (2014)
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