Relationship Lending Through the Cycle: What Can We Learn from Three Decades of Research?

43 Pages Posted: 2 Mar 2017

See all articles by Paola Bongini

Paola Bongini

Università degli Studi di Milano-Bicocca

Maria Luisa Di Battista

Catholic University of the Sacred Heart of Milan - Catholic University of the Sacred Heart of Piacenza

Laura Nieri

University of Genova - Department of Economics

Date Written: December 15, 2015

Abstract

This survey on Relationship Lending (RL) reviews thirty years of literature in a new analysis framework that considers the alleged benefits of RL in all possible scenarios under which banks and firms could operate from a good time scenario to a scenario of generalized crisis affecting both firms and banks. The number of studies currently conducted on RL in a scenario of prolonged crisis is growing rapidly, confirming that RL remains a viable solution and that it helps both banks and their customers to weather the storm. We also add suggestions on additional dimensions of RL that could be investigated in empirical studies to capture the presence of RL in the credit policy of each bank more effectively and thus better measure its effects on both sides – firm and bank – of the relationship.

Keywords: relationship lending, financial crisis, soft information

JEL Classification: G01; G21

Suggested Citation

Bongini, Paola and Di Battista, Maria Luisa and Nieri, Laura, Relationship Lending Through the Cycle: What Can We Learn from Three Decades of Research? (December 15, 2015). Available at SSRN: https://ssrn.com/abstract=2925893 or http://dx.doi.org/10.2139/ssrn.2925893

Paola Bongini

Università degli Studi di Milano-Bicocca ( email )

piazza dell'Ateneo Nuovo 1
Milano, 20126
Italy
+39 0264483012 (Phone)

Maria Luisa Di Battista

Catholic University of the Sacred Heart of Milan - Catholic University of the Sacred Heart of Piacenza ( email )

Via Emilia Parmense, 84
Piacenza
Italy

Laura Nieri (Contact Author)

University of Genova - Department of Economics ( email )

via Vivaldi, 5
Genova, GE 16126
Italy

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