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Relationship Lending, Bank Competition and Financial Stability

Juha-Pekka Niinimäki

Czech Economic Review2014article
ABDC C
Weight
0.41

What the paper says

This paper explores the effects of relationship lending on bank stability under perfect bank competition. Relationship banking generates profitable old lending relationships, which ease the stress to search and monitor new borrowers, and create great charter values for banks even under bank competition. These everlasting charter values mitigate risk-taking incentives improving financial stability. We find the maximum growth speed for banks so that they will avoid risk taking, and discover the optimal equity capital requirement: new banks and rapidly growing banks should have relatively more capital.

3 citations

Cite this paper

@article{juha-pekka2014,
  title        = {{Relationship Lending, Bank Competition and Financial Stability}},
  author       = {Juha-Pekka Niinimäki},
  journal      = {Czech Economic Review},
  year         = {2014},
}

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Relationship Lending, Bank Competition and Financial Stability

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Evidence weight

0.41

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.15 × 0.4 = 0.06
M · momentum0.80 × 0.15 = 0.12
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.