Skip Navigation


RFS Advance Access originally published online on July 1, 2006
Review of Financial Studies 2007 20(3):529-556; doi:10.1093/rfs/hhl018
This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow All Versions of this Article:
20/3/529    most recent
hhl018v1
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Similar articles in ISI Web of Science
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Mester, L. J.
Right arrow Articles by Renault, M.
Right arrow Search for Related Content
Related Collections
Right arrow G10 - General
Right arrow G20 - General
Right arrow G21 - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

© The Author 2006. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org.

Transactions Accounts and Loan Monitoring

Loretta J. Mester
Federal Reserve Bank of Philadelphia and The Wharton School, University of Pennsylvania

Leonard I. Nakamura
Federal Reserve Bank of Philadelphia

Micheline Renault
Université du Québec à Montréal

Address correspondence to Leonard Nakamura, Research Department, Federal Reserve Bank of Philadelphia, Ten Independence Mall, Philadelphia, PA 19106-1574, or e-mail: leonard.nakamura{at}phil.frb.org.

We show that transactions accounts, by providing ongoing data on borrowers’ activities, help financial intermediaries monitor borrowers. This information is most readily available to commercial banks, which offer these accounts and lending together. We find that (1) monthly changes in accounts receivable are reflected in transactions accounts; (2) borrowings in excess of collateral predict credit downgrades and loan write-downs; and (3) the lender intensifies monitoring in response. This is evidence on a key issue in financial intermediation—there is an advantage to providing deposit-taking and lending jointly. But this advantage may have fallen as the cost of communication has declined. (JEL G10, G20, G21)


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?


This article has been cited by other articles:


Home page
 REV FINANC STUDHome page
V. Ivashina, V. B. Nair, A. Saunders, N. Massoud, and R. Stover
Bank Debt and Corporate Governance
Rev. Financ. Stud., January 1, 2009; 22(1): 41 - 77.
[Abstract] [Full Text] [PDF]


Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.