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

Abstract

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

Affinito, Massimiliano, Do Interbank Customer Relationships Exist? And How Did They Function Over the Crisis? Learning from Italy (April 30, 2011). Systemic Risk, Basel III, Financial Stability and Regulation 2011. Available at SSRN: https://ssrn.com/abstract=1765822 or http://dx.doi.org/10.2139/ssrn.1765822

Massimiliano Affinito (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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