A Welfare Analysis of Regulation in Relationship Banking Markets

Posted: 21 Apr 2009

See all articles by Bruce Ian Carlin

Bruce Ian Carlin

affiliation not provided to SSRN

Rafael Rob

University of Pennsylvania - Department of Economics

Date Written: April 2009

Abstract

The increasing dependence of individuals on debt financing raises several welfare considerations that we analyze in this paper. We develop a dynamic, competitive model of relationship banking to determine how regulation influences borrowing and lending behavior, and analyze how it affects welfare in the market. We characterize the lending regimes that arise based on public policy, and evaluate the optimal choice by the government to induce particular lending practices to arise. Finally, we consider the effect that a credit reporting agency has on the market. In the paper, we highlight the new empirical implications that the model generates.

Keywords: G21

Suggested Citation

Carlin, Bruce Ian and Rob, Rafael, A Welfare Analysis of Regulation in Relationship Banking Markets (April 2009). Review of Finance, Vol. 13, Issue 2, pp. 369-400, 2009, Available at SSRN: https://ssrn.com/abstract=1389156 or http://dx.doi.org/rfn032

Bruce Ian Carlin (Contact Author)

affiliation not provided to SSRN

Rafael Rob

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-6775 (Phone)
215-573-2057 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
390
PlumX Metrics