discontinuity in the loan approval process of a large bank, the study finds that competing lenders responded to additional loan … financially excluded borrowers, greatly diminishing the profits accruing to the initiating bank. Lenders may therefore underinvest …

We studied information and interaction processes in six lending relationships between a universal bank and medium sized …, bank monitoring is based mainly on cheap, retrospective and internal data. In case of distress, more expensive, prospective … firm's investments might leave the bank in a very strong bargaining position and distort investment incentives. Therefore …