Discussion of “Bank Consolidation and Soft Information Acquisition in Small Business Lending”. Discussant Ken B. Cyree Frank R. Day/Mississippi Bankers Chair of Banking University of Mississippi.
Ken B. Cyree
Frank R. Day/Mississippi Bankers Chair of Banking
University of Mississippi
I. Assumptions based on findings in the extant literature on small business lending…(Berger and Udell, Scott, etc.).
The majority of the mergers in Japan (78%) targeted Shinkin banks, yet only 29% of banks in the sample are Shinkin banks.
C. Do Shinkin banks have a different focus because they are “cooperative” organizations? If these mutuals are taken over by a large bank, it would be expected that personal knowledge would fall. Mutuals likely have different objective functions, which is likely to include non-profit motives. Might soft information be more important for non-profit motives?
F. If the main question to ask is whether or not mergers reduce small business lending due to lower soft information production, why not estimate:
F. If soft information is not related to lending volume or prices, then it does not matter if it is more or less.