Keywords: Banks, small business, mergers, relationship lending, size structure, loan prices
Abstract: Banking industry consolidation has raised concern about the supply of small business credit since large banks
generally invest lower proportions of their assets in small business loans. However, we find that the likelihood that a
small business borrows from a bank of a given size is roughly proportional to the local market presence of banks of
that size, although there are exceptions. Moreover, small business loan interest rates depend more on the size
structure of the market than on the size of the bank providing the credit, with markets dominated by large banks
generally charging lower prices.
Full paper (144 KB PDF)
Home | FEDS | List of 2001 FEDS papers
To comment on this site, please fill out our feedback form.
Last update: January 2, 2002