Credit Risks: From Networks and Cooperation to Stable Markets

Mats Larsson, Kristina Lilja and Tom Petersson
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Mats Larsson: Uppsala University
Kristina Lilja: Uppsala University
Tom Petersson: Uppsala University

Chapter Chapter 5 in Risk Management in Early Banking, 2021, pp 59-83 from Palgrave Macmillan

Abstract: Abstract This chapter focusses on how local savings banks invested the deposits and how they dealt with the risks connected to such activities. To a large extent, especially in the first phases of their development, the managers of savings banks had to rely on their personal and social network in order to minimize risk. In later stages, as the savings banks had built up their own financial competence, and as formal regulations regarding investments were introduced, granting credit and loans became more standardized processes and allowed the saving banks to compete with especially the commercial banks.

Keywords: Social networks; Cooperation; Insider lending; Competition; Standardization (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:pal:psitcp:978-3-030-80775-7_5

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DOI: 10.1007/978-3-030-80775-7_5

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