We use unique data on banks' private risk assessments of corporate borrowers to quantify how competition among banks affect the risk sensitivity of interest rates in the Norwegian credit market. We show that an increase in competition makes corporate lending rates less sensitive to banks' own...

We use unique relationship-level data which includes banks’ private risk assessments of corporate borrowers to quantify how competition among banks a ects the risk sensitivity of interest rates in the Norwegian corporate credit market. We show that an increase in competition makes corporate...