Credit Spread Determinants? Yes, Loan Officer Seniority Matters!

29 Pages Posted: 10 Feb 2018

See all articles by Dupire Marion

Dupire Marion

University of Lille II; Vlerick Business School

Jean-Christophe Statnik

University of Lille II - University of Lille LSMRC & ISA

Frédéric Lobez

Université de Lille Nord de France – European Center for Corporate Control Studies

Date Written: January 30, 2018

Abstract

This paper investigates whether loan officer's level of seniority within the bank explains credit spreads. Based on a unique hand-collected database on loan applications from SMEs to a French cooperative bank between 1996 and 2009, the study suggests that senior loan officers charge higher interest rates than novice officers when -1- the bank-firm relationship is stronger and -2- the business climate is less favorable. The first result supports the idea that seniority of loan officers is a factor that fosters the hold-up problem while the second result shows that senior loan officers integrate the business climate into their pricing strategy to a greater extent than novice officers.

Keywords: banks, loan officers, relationship lending, small business

JEL Classification: G21

Suggested Citation

Marion, Dupire and Statnik, Jean-Christophe and Lobez, Frédéric, Credit Spread Determinants? Yes, Loan Officer Seniority Matters! (January 30, 2018). Available at SSRN: https://ssrn.com/abstract=3114157 or http://dx.doi.org/10.2139/ssrn.3114157

Dupire Marion

University of Lille II ( email )

Lille Cedex, 59020
France

Vlerick Business School ( email )

Library
REEP 1
Gent, BE-9000
Belgium

Jean-Christophe Statnik (Contact Author)

University of Lille II - University of Lille LSMRC & ISA ( email )

1, rue de Mulhouse
Lille, 59000
France

Frédéric Lobez

Université de Lille Nord de France – European Center for Corporate Control Studies ( email )

Lille Cedex, 59020
France

Register to save articles to
your library

Register

Paper statistics

Downloads
16
Abstract Views
179
PlumX Metrics