Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/273721 
Year of Publication: 
2023
Series/Report no.: 
Deutsche Bundesbank Discussion Paper No. 09/2023
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
Banks lend more to banks that are similar to them. Using data from the German credit register and proprietary supervisory data on the quality of banks' loan portfolio, we show that a similar portfolio of the lending and borrowing bank helps to overcome information asymmetries in interbank markets. While interbank lenders generally do not adjust their lending to information on the counterparty's portfolio quality, banks with an exposure to similar industries and regions strongly react to this private information. Lending between similar banks is particularly important for borrowers with an opaque loan portfolio, which do not obtain credit from dissimilar peers.
Subjects: 
Peer monitoring
interbank markets
asymmetric information
portfolio quality
portfolio similarity
systemic risk and contagion
JEL: 
E50
G11
G20
G21
ISBN: 
978-3-95729-940-6
Document Type: 
Working Paper

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