Does Bank Monitoring Affect Loan Repayment?

Nicola Branzoli and Fulvia Fringuellotti

No 20221202, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Banks monitor borrowers after originating loans to reduce moral hazard and prevent loan losses. While monitoring represents an important activity of bank business, evidence on its effect on loan repayment is scant. In this post, which is based on our recent paper, we shed light on whether bank monitoring fosters loan repayment and to what extent it does so.

Keywords: bank monitoring; nonperforming loans; tax policy; financial intermediation; banks (search for similar items in EconPapers)
JEL-codes: G2 G3 (search for similar items in EconPapers)
Date: 2022-12-02
New Economics Papers: this item is included in nep-ban and nep-fdg
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