Borrower Poaching and Information Display in Credit Markets

J.M.C. Bouckaert, H.A. Degryse

Research output: Working paperDiscussion paperOther research output

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Abstract

The Riegle-Neal Act in the US and the Economic and Monetary Union in Europe are recent initiatives to stimulate financial integration.These initiatives allow new entrants to "poach" the incumbents' clients by offering them attractive loan offers.We show that these deregulations may be insuficient since asymmetric information seriously hampers the integration of credit markets.This asymmetry stems from the informational advantage incumbent banks have about their current clients vis-a-vis potential entrants.More-over, banks may strategically display some information hindering entry when asymmetric information is moderate.We also show that voluntary information sharing emerges only when asymmetric information is low.
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Number of pages27
Volume2001-41
Publication statusPublished - 2001

Publication series

NameCentER Discussion Paper
Volume2001-41

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Asymmetric information
Credit markets
Poaching
Incumbents
Loans
Information sharing
Financial integration
New entrants
Asymmetry
Deregulation
Economic and monetary union

Keywords

  • credit markets
  • economic integration
  • information
  • banking
  • competition
  • access to market

Cite this

Bouckaert, J. M. C., & Degryse, H. A. (2001). Borrower Poaching and Information Display in Credit Markets. (CentER Discussion Paper; Vol. 2001-41). Tilburg: Finance.
Bouckaert, J.M.C. ; Degryse, H.A. / Borrower Poaching and Information Display in Credit Markets. Tilburg : Finance, 2001. (CentER Discussion Paper).
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Bouckaert, JMC & Degryse, HA 2001 'Borrower Poaching and Information Display in Credit Markets' CentER Discussion Paper, vol. 2001-41, Finance, Tilburg.

Borrower Poaching and Information Display in Credit Markets. / Bouckaert, J.M.C.; Degryse, H.A.

Tilburg : Finance, 2001. (CentER Discussion Paper; Vol. 2001-41).

Research output: Working paperDiscussion paperOther research output

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KW - credit markets

KW - economic integration

KW - information

KW - banking

KW - competition

KW - access to market

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BT - Borrower Poaching and Information Display in Credit Markets

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Bouckaert JMC, Degryse HA. Borrower Poaching and Information Display in Credit Markets. Tilburg: Finance. 2001. (CentER Discussion Paper).