The importance of bank seniority for relationship lending

Stanley D. Longhofer and Joao Santos

No 9808, Working Paper from Federal Reserve Bank of Cleveland

Abstract: The authors examine two aspects of a bank's interaction with its borrowers--the relative priority of bank debt and the role of banks as "relationship lenders." They show that making the bank senior improves its incentives to build a relationship with the firm, thereby fulfilling an important function of intermediated debt.

Keywords: Bank; loans (search for similar items in EconPapers)
Date: 1998
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Related works:
Working Paper: The importance of bank seniority for relationship lending (1998)
Journal Article: The importance of bank seniority for relationship lending (1999)
Journal Article: The Importance of Bank Seniority for Relationship Lending (2000)
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Persistent link: http://EconPapers.repec.org/RePEc:fip:fedcwp:9808

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