On the Rationale of Bank Lending in Pre-Crisis Thailand

Arbeitspapier

Evidence from credit files is provided to examine bank lending determinants of Thai commercial banks. Their lending practice follows reasonable patterns as a standard set of variables, including indirect risk variables, explains much of the variance in interest rate spread. Reflecting institutional differences with mature markets, we find higher importance of relationship banking and risk control via credit availability. Information about later default reveals prudent relationship lending. However, banks could have made better use of available information about borrowers' riskiness. These findings do not support a general verdict of bad banking but indicate room to improve lending decisions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Diskussionsbeitrag ; No. 326

Classification and Topics

• Classification: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
• Subject: Financial system ; bank lending ; relationship lending ; financial crises ; emerging economies ; Thailand

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Menkhoff, Lukas ; Suwanaporn, Chodechai
• Event: Veröffentlichung
• (who): Universität Hannover, Wirtschaftswissenschaftliche Fakultät
• (where): Hannover
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/22438
• Last update: 10.03.2025, 11:44 AM CET