A substantial literature has investigated the role of relationship lending in shielding borrowers from idiosyncratic shocks. Much less is known about how lending relationships and bank-specific characteristics affect the functioning of the credit market in an economy-wide crisis, when banks may...

The recent economic and financial crisis has drawn attention to how mutual guarantee institutions (MGIs) facilitate small and medium enterprises in accessing bank financing. The aim of this paper is twofold. First, we describe the structural features of the Italian market for mutual guarantees...

We study how relationship lending and transaction lending vary over the business cycle. We develop a model in which relationship banks gather information on their borrowers, which allows them to provide loans for profitable firms during a crisis. Due to the services they provide, operating costs...

We investigate the duration of bad loans for a unique data set of sole proprietorships in Italy, finding that bad loans for female firms last longer. However, this result is mainly due to the fact that loans granted to female firms are less frequently written off than those to male ones,...

During the financial crisis banks faced liquidity shocks, and lending slowed down. The reduction in credit availability was due to demand- and supply-side factors. The decrease in turnover and investment led to a contraction of financial needs; on the other hand, the tightening of credit supply...

Social capital is a key factor affecting the functioning of financial markets (Guiso, Sapienza and Zingales, 2004). However, the estimation of the effect of social capital on credit markets is notoriously difficult. In this paper we exploit the recent Lehman Brothers crisis and a rich dataset to...

A large body of literature has shown that small firms experience difficulties in accessing the credit market due to informational asymmetries. Banks can overcome these asymmetries through relationship lending, or at least mitigate their effects by asking for collateral. Small firms, especially...

This paper investigates the existence of cross-sectional differences in the response of lending to monetary policy and GDP shocks owing to a different degree of bank capitalization. The effects on lending of shocks to bank capital that are caused by a specific (higher than 8 per cent) solvency...

Interbank markets allow banks to cope with specific liquidity shocks. At the same time, they may be a channel allowing a bank default to spread to other banks. This paper analyzes how contagion propagates within the Italian interbank market using a unique data set including actual bilateral...

We empirically investigate the relevance of demand-side complementarity between electronic and traditional provision of banking services. Since no systematic data on prices for the two types of services is available, it is not possible to estimate cross-elasticities of demand. We resort to two...