Do Interbank Customer Relationships Exist? And How Did They Function Over the Crisis? Learning from Italy
40 Pages Posted: 28 Feb 2011 Last revised: 3 Jun 2011
Date Written: April 30, 2011
Using 11 years of monthly Italian bank-by-bank data, this paper matches the bilateral amounts and the identity of each interbank borrower and lender with a large list of explanatory variables. My outcomes show that interbank customer relationships, namely stable and strong relationships between pairs of borrowing and lending banks, exist in Italy, persist over time, and functioned well over the crisis allowing the healthier banks to provide funds and the troubled ones to receive financing.
Keywords: interbank market, lending relationship, financial crisis
JEL Classification: G21, G28, C23, C24
Suggested Citation: Suggested Citation