Niveau: Supérieur
The cross-selling of bank credit and other services : a theoretical and empirical analysis. Emmanuelle Nys* Preliminary Version May, 2002 Abstract Several recent studies have shown that banks have increased their service activities in recent years. This paper studies the cross-selling of services and credit, that is services sold by a bank because of an already existing credit banking relationship. In the theoretical model, we suppose that banks anticipate the potential sale of services to their clients when competing on the credit mar- ket. The question is whether this particular attitude a?ects the pricing strategy of banks as well as the risk borne on their balance sheet. Two of the main results derived from the analysis of the model is that services provision implies a lower loan interest rate and an increase of the average riskiness of all projects …nanced by banks. The study, undertaken in this paper, tests services provision as one of the explanatory variables of the credit rate, in twelve selected European countries during the period 1989-1999 for a sample of 1436 banks. The empirical results tend to con…rm the inverse impact of commissions revenue on loan interest rate. 0 I would like to thank Michel Cavagnac, Nick Horsewood, Andy Mullineux, Cillian Ryan, Alain Sauviat and Amine Tarazi for their very helpful com- ments. The usual disclaimer applies. *PhD Student, Centre de Recherche en Macro-économie Monétaire, Université de Limoges, and Global Finance Group, University of Birmingham (U.
- bank
- between loan
- deposit rates
- interest rate
- service
- banks
- existing bank-…rm
- project
- rate