supporting the shareholder-as-customer model. Bank values responded positively to the presence of large-block individual … concerned with dividend returns than access). Moreover, firm value declined as directors consumed larger fractions of a bank …'s loans, which reduced the bank's ability to extend credit to other shareholders …

Recent banking theory holds that durable firm-bank relationships are valuable to both parties. Using contract …-specific loan records of a nineteenth-century U.S. bank, this paper shows that firms that form extended relationships with banks … receive three principal benefits. First, firms with extended relationships face lower credit costs. As the bank …