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Relationship lending during a trust crisis on the interbank market: A friend in need is a friend indeed

Tijdschriftbijdrage - Tijdschriftartikel

© 2019 Elsevier B.V. We exploit uncertainty regarding banks’ involvement in money laundering activities as a natural experiment to study the functioning of the interbank market in uncertain times. We show that bank couples with a stronger relationship (i.e., more frequent and reciprocal interactions before the event)are more likely to continue lending to one another, and at lower interest rates. This is in line with a “helping hand” or “flight to friends” hypothesis during crisis.
Tijdschrift: Economics Letters
ISSN: 0165-1765
Volume: 182
Pagina's: 1 - 4
Jaar van publicatie:2019
BOF-keylabel:ja
IOF-keylabel:ja
BOF-publication weight:0.5
CSS-citation score:1
Auteurs:International
Authors from:Higher Education
Toegankelijkheid:Closed