Lending relationships in the interbank market

  title={Lending relationships in the interbank market},
  author={J Faridy Cocco and Francisco J. Gomes and Nuno C. Martins},
a r t i c l e i n f o a b s t r a c t We use a unique dataset to show that relationships are an important determinant of banks' ability to access interbank market liquidity. More precisely, we find that: (i) banks with a larger reserve imbalance are more likely to borrow funds from banks with whom they have a relationship, and to pay a lower interest rate than otherwise; (ii) smaller banks and banks with more non-performing loans tend to have limited access to international markets, and rely… CONTINUE READING
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