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Bank Lending Technologies and SME Credit Rationing in Europe in the 2009 Crisis

Giovanni Ferri, Pierluigi Murro and Zeno Rotondi ()
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Zeno Rotondi: UniCredit Bank

No wpC05, CERBE Working Papers from CERBE Center for Relationship Banking and Economics

Abstract: The first wave of the global financial crisis hit Europe in the last part of 2008 and through 2009. With banks in a tailspin, credit rationing intensified – as measured in various different ways – particularly for the small and medium sized enterprises (SMEs). The extent of such retrenchment in the supply of credit could reflect not only the worsened general condition of the European banks but also vary at the micro level depending on the lending technologies being used in the SME-main bank rapport. Using the EFIGE database, we examine SME credit rationing in seven EU countries (Austria, France, Germany, Hungary, Italy, Spain and the UK) and try to assess the extent to which differences in the lending technologies and in the status of the firm-main bank relationship contributed to the phenomenon. We find that a firm matching with a bank using the transactional lending technology was more likely to end up rationed for credit during the first part of the financial crisis.

Keywords: Bank-Firm Relationships; Asymmetric Information; Credit Rationing. (search for similar items in EconPapers)
JEL-codes: D82 G21 G30 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2016-02
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-ent, nep-eur and nep-sbm
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