Screening distant borrowers presents challenges: Netherlands Bank paper
A Netherlands Bank paper published on Thursday shows that geographical location presents challenges in screening and monitoring borrowers during a financial crisis.
Ralph de Haas and Neeltje van Horen, the paper's authors, use a dataset on cross-border bank lending to analyse the impact of information variables on the stability of cross-border lending to foreign banks during a financial crisis.
De Haas and van Horen find a strong and robust negative effect of geographical distance on lending
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