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The joint size and ownership specialization in banks' lending

Author

Listed:
  • Javier Delgado

    (Banco de España)

  • Vicente Salas-Fumás

    (Banco de España
    Universidad de Zaragoza)

  • Jesús Saurina

    (Banco de España)

Abstract
In this paper we study the specialization of Spanish banks along two intertwined dimensions: size and ownership form. We find some interesting results at odds with the existing empirical literature. As commercial banks increase their size, they lend more to large borrowers but that is not the case for the largest banks. For savings banks, the larger the size the more likely is the lending to small borrowers. Moreover, we find evidence that larger commercial banks are more willing to lend to low credit quality borrowers than medium size banks, while the opposite is true among savings banks. Banks' specialization in lending to business firms seems to go across the reputation considerations, risk shifting behavior and lending technologies most often considered in the literature.

Suggested Citation

  • Javier Delgado & Vicente Salas-Fumás & Jesús Saurina, 2006. "The joint size and ownership specialization in banks' lending," Working Papers 0606, Banco de España.
    • Handle: RePEc:bde:wpaper:0606
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    File URL: http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/06/Fic/dt0606e.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    bank specialization; transactional lending; relational lending; ownership form;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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