Relationship Banking in the Residential Mortgage Market? Evidence from Switzerland

Martin Brown and Matthias Hoffmann

No 1310, Working Papers on Finance from University of St. Gallen, School of Finance

Abstract: We examine to what extent mortgage lending is characterized by strong relationships between banks and their borrowers. Our analysis is based on detailed survey data covering all current bank relations for a sample of 1,481 Swiss households out of which 687 have a mortgage. We document that mortgage borrowers maintain significantly more bank relations than comparable households without a mortgage. However, this does not imply that mortgage relations are loose. Comparing mortgage relations to other bank relations of the same households we find that mortgage relations are used for a broader scope of transactions and are held with banks that are located closer to the household. Examining the heterogeneity of mortgage relations across households, we find that financially sophisticated households are less likely to hold their mortgage with a local bank.

Keywords: Mortgage loans; Household finance; Relationship banking. (search for similar items in EconPapers)
JEL-codes: D14 G21 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2013-08, Revised 2015-06
New Economics Papers: this item is included in nep-ban and nep-ure
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Relationship Banking in the Residential Mortgage Market? Evidence from Switzerland (2016)
Journal Article: Relationship Banking in the Residential Mortgage Market? Evidence from Switzerland (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:usg:sfwpfi:2013:10

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