Hundred Years of British Firm - Bank Relationships : Why the Transition to Multiple Banking?

We study how relationships between firms and banks evolved since the end of the Nineteenth century until the end of the Twentieth century in Britain. We document and explain a remarkable shift from bilateral to multilateral relationship banking during this period, in particular during the last two decades of the sample period. Using duration analyses we show that larger, more complex and global companies have a higher need for multiple bank relationships. Older, larger firms that are levering up and engaged with multiple banks are less likely to terminate the relationships they already maintain