A simple enquiry on heterogeneous lending rates and lending behaviour



Lend. rates to loan size class "c5" by area from
small and minor banks

■D
C
φ

20

15

10

5

0

■ area 1

□ area 2

U area 3

area 4

И area 5

И area 6


A very precise pattern, on the contrary is detectable in the behaviour of interest rates according to
the different class sizes of loans in the various geographic areas (as observed for each given lender size
class)
. In particular, the relation between the loan size class and the level of the interest rate is particularly
evident if one compares the interest rate level between the loan class “C5” and the other categories. In
addition, the interest rate to she smaller class size of loans is constantly higher than the interest rate to the
other classes. An exception to this apparent negative relation between loan size class and lending rates is
given by the lending rates from average size banks (B2) in areas 3, 5, 6 and from small and minor banks
(B3) in “area 5” where the negative relation between lending rate and loan size does not exist for the
intermediate size classes of loans, although it still exists between those and the two extreme loan size
classes. All these data would be confirmed, and be also more evident in the descriptive statistical tables
of the appendix.

Of course, the relation between loan size and level of lending rate might just be apparent and
explained by different theoretical variables, such as risk and demand expectations: this is shown in the
very simple econometric analysis of the next sections, where the estimates with proxies “capturing” risk
and the different market power of lenders and borrowers yield completely non-significant dummies for the
loan size classes, in spite of what seems to appear from the graphics.

13


AREA 1




More intriguing information

1. Ahorro y crecimiento: alguna evidencia para la economía argentina, 1970-2004
2. Regional Intergration and Migration: An Economic Geography Model with Hetergenous Labour Force
3. The open method of co-ordination: Some remarks regarding old-age security within an enlarged European Union
4. The name is absent
5. Who is missing from higher education?
6. Chebyshev polynomial approximation to approximate partial differential equations
7. Fiscal federalism and Fiscal Autonomy: Lessons for the UK from other Industrialised Countries
8. Accurate and robust image superresolution by neural processing of local image representations
9. The name is absent
10. The name is absent
11. O funcionalismo de Sellars: uma pesquisa histδrica
12. WP 48 - Population ageing in the Netherlands: Demographic and financial arguments for a balanced approach
13. The name is absent
14. Foreign Direct Investment and the Single Market
15. Ultrametric Distance in Syntax
16. The name is absent
17. EMU's Decentralized System of Fiscal Policy
18. Detecting Multiple Breaks in Financial Market Volatility Dynamics
19. The name is absent
20. Globalization and the benefits of trade