Abstract
This chapter analyses the evolving dynamics between banks and firms. It begins by examining the bank-firm relationship from before 1995, characterized by mutual trust and personal interactions, through to the period between 1995 and 2010, where the relationship gained complexity due to global banking practices and judicial systems. The phase from 2010 to 2023 is marked by banks’ transition towards ethical banking and becoming holistic partners for firms. The chapter also explores conventional finance, focusing on consistent elements like credit rationing, interest rates, and collateral requirements. It introduces the concept of alternative finance, highlighting its impact on traditional banking models and the necessity for banks to innovate in response. The chapter concludes that while basic lending principles remain unchanged, the bank-firm relationship has evolved significantly, influenced by broader financial, societal, and technological trends.
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Palmieri, E., Geretto, E.F. (2023). The Determinants of Bank-Firm Relationships: Overview, Evolution, and Challenges. In: Adapting to Change. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-50265-1_2
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