Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/211863 
Year of Publication: 
2000
Series/Report no.: 
Bank of Finland Discussion Papers No. 9/2000
Publisher: 
Bank of Finland, Helsinki
Abstract: 
Whether or not banks are engaged in ex ante monitoring of customers may have important consequences for the whole economy.We approach this question via a model in which banks can invest in either information acquisition or market power (product differentiation). The two alternatives generate different predictions, which are tested using panel data on Finnish local banks.We find evidence that banks' investments in branch networks and human capital (personnel) contribute to information acquisition but not to market power.We also find that managing customers' money transactions enhances banks ability to control their lending risks.
Persistent Identifier of the first edition: 
ISBN: 
951-686-667-0
Document Type: 
Working Paper

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