On the Rationale of Bank Lending in Pre-Crisis Thailand

Lukas Menkhoff and Chodechai Chodechai Suwanaporn

Hannover Economic Papers (HEP) from Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät

Abstract: Evidence from credit files is provided to examine bank lending determinants of Thai commercial banks. Their lending practice follows reasonable patterns as a standard set of variables, including indirect risk variables, explains much of the variance in interest rate spread. Reflecting institutional differences with mature markets, we find higher importance of relationship banking and risk control via credit availability. Information about later default reveals prudent relationship lending. However, banks could have made better use of available information about borrowers' riskiness. These findings do not support a general verdict of bad banking but indicate room to improve lending decisions.

Keywords: Financial system; bank lending; relationship lending; financial crises; emerging economies; Thailand (search for similar items in EconPapers)
JEL-codes: G21 O16 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2005-11
New Economics Papers: this item is included in nep-fin, nep-fmk and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://diskussionspapiere.wiwi.uni-hannover.de/pdf_bib/dp-326.pdf (application/pdf)

Related works:
Journal Article: On the rationale of bank lending in pre-crisis Thailand (2007)
Working Paper: THE RATIONALE OF BANK LENDING IN PRE-CRISIS THAILAND (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:han:dpaper:dp-326

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