Bank relationships diminish risk of default: ECB paper


Retail customers who have a relationship with their savings bank prior to applying for a loan default significantly less than customers with no prior relationship, according to a European Central Bank paper published on Thursday.

Manju Puri, Jörg Rocholl and Sascha Steffen, the paper's authors, use a unique, comprehensive dataset of more than one million loans by savings banks in Germany to analyse the importance of retail consumers' banking relationships for loan defaults.

The authors finds

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