Service provision and loans: Price and risk implications

Emmanuelle Nys

Revue d'économie politique, 2008, vol. 118, issue 3, 411-428

Abstract: Deregulation of the banking system has increased competition and prompted wide changes in the activities of banks. As revenue from intermediation activities of banks has decreased, banks have broadened the range of products they offer to their clients, which generate revenue other than interest margin. This paper offers a complementary explanation of the link between intermediation activities and service provision. We show that banks may be willing to decrease their lending rate, using loans as loss leader, and take on higher credit risk, in order to capture clients to whom they can sell services.

Keywords: bank interest margins; fee; based activities; asymmetric information (search for similar items in EconPapers)
Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.cairn.info/load_pdf.php?ID_ARTICLE=REDP_183_0411 (application/pdf)
http://www.cairn.info/revue-d-economie-politique-2008-3-page-411.htm (text/html)
free

Related works:
Working Paper: Service provision and loans: Price and risk implications (2008)
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:cai:repdal:redp_183_0411

Access Statistics for this article

More articles in Revue d'économie politique from Dalloz
Bibliographic data for series maintained by Jean-Baptiste de Vathaire ().