Borrower Poaching and Information Display in Credit Markets

Hans Degryse and Jan Bouckaert

No 2936, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The Riegle-Neal Act in the US and the Economic and Monetary Union in Europe are recent initiatives to stimulate financial integration. These initiatives allow new entrants to ?poach? the incumbents' clients by offering them attractive loan offers. We show that these deregulations may be insufficient since asymmetric information seriously hampers the integration of credit markets. This asymmetry stems from the informational advantage incumbent banks have about their current clients vis-a-vis potential entrants. Moreover, banks may strategically display some information, hindering entry when asymmetric information is moderate. We also show that voluntary information sharing emerges only when asymmetric information is low.

Keywords: Financial integration; Banking competition; Asymmetric information; Barriers to entry (search for similar items in EconPapers)
JEL-codes: D43 G21 L13 (search for similar items in EconPapers)
Date: 2001-09
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://cepr.org/publications/DP2936 (application/pdf)

Related works:
Working Paper: Borrower Poaching and Information Display in Credit Markets (2001)
Working Paper: Borrower Poaching and Information Display in Credit Markets (2001)
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:cpr:ceprdp:2936

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP2936

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().