In recent history, it looked to many as if rural financial markets would become dominated by large banks that offered relatively expensive credit to agricultural firms. However, the 1990's have seen a resurgence in smaller banks with a focus on smaller, agricultural producer loans. Moreover, small banks may be more competitive than ever with respect to interest rates. This report outlines some ...

I use geographic variation in bank lending to study how bank real estate losses impacted the supply of credit and employment during the Great Recession. Banks exposed to distressed housing markets cut mortgage and small business lending relative to other banks in the same county. This lending contraction had real effects, as counties whose banks were exposed to adverse shocks in other markets s...

Relationship lending is a common practice in credit financing all over the world, particularly in Germany. On the basis of a comprehensive data set comprising information on firm-bank relationships for more than 16,000 observations, this study analyses the determinants of relationship lending in Germany. We find that small, young and R&D-intensive firms tend to choose relationship lending. Furt...

For banks and financial institutions, credit risk had been an essential factor that needed to be managed well. Credit risk was the possibility that a borrower of counter party would fail to meet its obligations in accordance with agreed terms. Credit risk; therefore arise from the bank’s dealings with or lending to corporate, individuals, and other banks or financial institutions.  Credit risk...

Using the data of individual loan contracts extended by the Japan Finance Corporation for Small and Medium Enterprise (JASME), which is one of the predecessor institutions of the Japan Finance Corporation (JFC) that aimed at lending to small and medium enterprises (SMEs), we examine whether the JASME’s lending substituted for the reduced lending supply by private banks during the period of the ...

Critics claim that capital requirements can exacerbate credit cycles by restricting lending in an economic downturn. The introduction of Basel 2, in particular, has led to concerns that risksensitive capital charges are highly correlated with the business cycle. The Basel Committee is contemplating a revision of the Basel Accord by introducing counter-cyclical capital buffers. Others claim that...

Borrower level data from over 1,000 agricultural lending relationships are used to examine how several factors influence the costs and returns of extending agricultural credit. The characteristics of agricultural borrowers and their demand for various financial products and services are described. The results also provide estimates of the costs and returns of agricultural lending and the extent...