Lending technology, bank organization and competition
Hans Degryse (),
Steven Ongena () and
Günseli Tümer-Alkan ()
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Günseli Tümer-Alkan: VU University Amsterdam, Postal: Department of Finance, FEWEB/FIN, Room 1E-69, De Boelelaan 1105, NL-1081HV Amsterdam, THE NETHERLANDS, http://staff.feweb.vu.nl/gtumeralkan/
Journal of Financial Transformation, 2009, vol. 26, 24-30
This paper reviews recent theoretical and empirical studies investigating how both bank technology and organization shape bank-borrower interactions. We refer to two related concepts for bank technology. First, the technologies banks employ in loan granting decisions and second, the advances in information technology linked to the bank‟s lending technology. We also summarize and interpret the theoretical and empirical work on bank organization and its influence on lending technologies. We show that the choice of lending technology and bank organization depend heavily on the availability of information, the technological progress in the collection of information, as well as the banking market structure and the legal environment. We draw important policy conclusions from the literature. Competition authorities and supervisors have to remain alert to the consequences of the introduction of any new technology because: (1) advances in technology do not necessarily lead to more intense banking competition, and (2) the impact of technological and financial innovation on financial efficiency and stability depends on the incentives of the entire „loan production chain.‟
Keywords: Bank technology; bank-borrower interactions; financial legal environment (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:jofitr:1393
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