Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/322992 
Year of Publication: 
2019
Series/Report no.: 
U.S.E. Working Papers Series No. 19-04
Publisher: 
Utrecht University, Utrecht University School of Economics (U.S.E.), Utrecht
Abstract: 
We exploit uncertainty regarding banks' involvement in money laundering activities as a natural experiment to study the functioning of the interbank market in uncertain times. We show that bank couples with a stronger relationship (i.e., more frequent and reciprocal interactions before the event) are more likely to continue lending to one another, and at lower interest rates. This is in line with a "helping hand" or "flight to friends" hypothesis during crisis.
Subjects: 
banks
interbank market
relationship banking
helping-hand hypothesis
Document Type: 
Working Paper

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