Soft Information and Loan Supply in the Crisis: Evidence from the Credit Files of a Large Bank

Rivista Bancaria - Minerva Bancaria No. 5-6/2011

19 Pages Posted: 12 Feb 2012

See all articles by Francesca Bartoli

Francesca Bartoli

Assolombarda

Giovanni Ferri

LUMSA University

Pierluigi Murro

LUISS Guido Carli University - Department of Business and Management

Zeno Rotondi

UNICREDIT; LUISS Guido Carli University

Date Written: February 12, 2012

Abstract

Using a large database built from the credit files of UniCredit we focus on loans to small businesses at the peak of the crisis. We study the determinants of the worsening of financial tension up to March 2009 for those customers experiencing (or close to) financial tension already at the end of December 2008. We find that, controlling for internal ratings, financial tension less likely worsened for the customers enjoying a longer-term relationship. This evidence suggests that during the crisis this large bank used soft information to shift its loan supply toward borrowers with lower ex ante asymmetries of information.

Keywords: Financial crisis, Bank-firm relationships, Asymmetric information, Soft information, Small business finance

JEL Classification: D82, G21, G30, O16

Suggested Citation

Bartoli, Francesca and Ferri, Giovanni and Murro, Pierluigi and Rotondi, Zeno, Soft Information and Loan Supply in the Crisis: Evidence from the Credit Files of a Large Bank (February 12, 2012). Rivista Bancaria - Minerva Bancaria No. 5-6/2011. Available at SSRN: https://ssrn.com/abstract=2003771

Francesca Bartoli

Assolombarda ( email )

via Pantano 9
Milano, Milano 20122
Italy

Giovanni Ferri

LUMSA University ( email )

Via della Traspontina
Roma, Rome 00192
Italy

HOME PAGE: http://www.lumsa.it/giovanni-ferri

Pierluigi Murro (Contact Author)

LUISS Guido Carli University - Department of Business and Management ( email )

Via Salvini, 3
Rome, 00198
Italy

Zeno Rotondi

UNICREDIT ( email )

VIA SPECCHI 16
ROME, 00186
Italy

HOME PAGE: http://docenti.luiss.it/rotondi

LUISS Guido Carli University ( email )

Via O. Tommasini 1
Rome, Roma 00100
Italy

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