Hubbard, R Glenn; Kuttner, Kenneth N; Palia, Darius N - In: The Journal of Business 75 (2002) 4, pp. 559-81
We use a matched sample of individual loans, borrowers, and banks to investigate the effect of banks' financial health on the cost of loans, controlling for borrower risk and information costs. Our principal finding is that low-capital banks tend to charge higher loan rates than well-capitalized...