Soft Information and Default Prediction in Cooperative and Social Banks

22 Pages Posted: 18 Jun 2014

See all articles by Simon Cornée

Simon Cornée

Université de Rennes 1 - CREM CNRS

Date Written: June 17, 2014

Abstract

In this paper, to begin with, we define soft information as qualitative, subjective information produced by banks through the establishment of long-term lending relationships. We then highlight the importance of soft information for cooperative and social banks in the screening, pricing and monitoring of their borrowers as a result of their institutional features (governance, values, etc.) and the specificities of their clientele. We finally emphasise the value of qualitative (economic, social and/or environmental) factors stemming from the production of soft information in predicting credit default events.

Keywords: Relationship lending; soft information; credit rating; cooperative and social banking

JEL Classification: G21, L22, M21, P13

Suggested Citation

Cornée, Simon, Soft Information and Default Prediction in Cooperative and Social Banks (June 17, 2014). Journal of Entrepreneurial and Organizational Diversity, Special Issue on Cooperative Banks, Vol. 3, No. 1, 2014, 89-109. Available at SSRN: https://ssrn.com/abstract=2450064

Simon Cornée (Contact Author)

Université de Rennes 1 - CREM CNRS ( email )

7 place Hoche
Rennes, Bretagne 35065
France

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