Is relationship lending special? Evidence from credit-file data in Germany

Ralf Elsas and Jan Krahnen ()

No 1998/05, CFS Working Paper Series from Center for Financial Studies (CFS)

Abstract: The German financial market is often characterized as a bank-based system with strong bank-customer relationships. The corresponding notion of a housebank is closely related to the theoretical idea of relationship lending. It is the objective of this paper to provide a direct comparison between housebanks and normal banks as to their credit policy. Therefore, we analyze a new data set, representing a random sample of borrowers drawn from the credit portfolios of five leading German banks over a period of five years. We use credit-file data rather than industry survey data and, thus, focus the analysis on information that is directly related to actual credit decisions. In particular, we use bank-internal borrower rating data to evaluate borrower quality, and the bank's own assessment of its housebank status to control for information-intensive relationships.

Keywords: relationship lending; housebanks; loan price determination; credit volume (search for similar items in EconPapers)
JEL-codes: C31 C33 G21 (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (377)

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Journal Article: Is relationship lending special? Evidence from credit-file data in Germany (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cfswop:199805

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