Relationship Banking in the Residential Mortgage Market? Evidence from Switzerland

Item Type Journal paper
Abstract

We examine to what extent mortgage lending is characterized by strong relationships between banks and their borrowers. Our analysis is based on detailed survey data covering all current bank relations for a sample of 1,481 Swiss households out of which 687 have a mortgage. We document that mortgage borrowers maintain significantly more bank relations than comparable households without a mortgage. However, this does not imply that mortgage relations are loose. Comparing mortgage relations to other bank relations of the same households we find that mortgage relations are used for a broader scope of transactions and are held with banks that are located closer to the household. Examining the heterogeneity of mortgage relations across households, we find that financially sophisticated households are less likely to hold their mortgage with a local bank.

Authors Brown, Martin & Hoffmann, Matthias
Journal or Publication Title Schweizerische Zeitschrift für Volkswirtschaft und Statistik
Language English
Keywords Mortgage loans, Household finance, Relationship banking.
Subjects economics
HSG Classification contribution to scientific community
Refereed Yes
Date 2016
Publisher Lang
Place of Publication Bern
Series Name School of Finance Working Paper Series
Volume 152
Number 1
Page Range 23-48
ISSN 0303-9692
Official URL http://EconPapers.repec.org/RePEc:ses:arsjes:2016-...
Depositing User Prof. Dr. Martin Brown
Date Deposited 19 Aug 2013 14:01
Last Modified 23 Aug 2016 11:17
URI: https://www.alexandria.unisg.ch/publications/225034

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Citation

Brown, Martin & Hoffmann, Matthias (2016) Relationship Banking in the Residential Mortgage Market? Evidence from Switzerland. Schweizerische Zeitschrift für Volkswirtschaft und Statistik, 152 (1). 23-48. ISSN 0303-9692

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https://www.alexandria.unisg.ch/id/eprint/225034
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