Bank Ownership and Lending Behaviours: The Relevance of Community Links
In: Economic affairs: journal of the Institute of Economic Affairs, Band 36, Heft 2, S. 168-174
ISSN: 1468-0270
AbstractAsset size does not seem to be a good predictor of bank lending behaviours. An overlooked determinant of lending may be the relationship a bank has with its local community. This article suggests that US banks owned and headquartered in a community are typically central actors in local business networks, and bank executives are intimately connected to their communities. As a result, lending decisions made by banks headquartered in the community often become influenced by the social relations and social networks of bank executives.