Open Research Seminar

Karolis Liaudinskas, a PhD candidate at Pompeu Fabra University, will present the research paper “Loss of a Lending Relationship: Pain or Relief?”, co-authored with Kristina Grigaitė from Bank of Lithuania. The authors studied how large are firms’ costs of switching between banks and what causes those costs. Researchers used loan-level data to estimate firms’ hold-up costs and bank-switching costs induced by banks’ closures. They find that closure of the “Healthy bank” did not affect its clients’ borrowing costs, while the closure of the “Distressed bank” led to a sharp drop in loan rates. The results suggest that distressed banks may use informational monopoly power to exploit their good borrowers. Those findings offer to consider the potential benefit of bank closures when bank failures are present. To participate in the seminar, please submit an application containing your first name, last name, place of employment, and e-mail to [email protected]. Applications must be submitted by 10 a.m. on 6 December 2019. A limited number of slots are available, and the NBU reserves the right to accept or reject applications. Applicants will be notified via email whether their application has been accepted. The registration of participants will take place from 13:40 to 13:55 p.m. The NBU is a restricted access facility, and photo identification is required to be admitted.