The Bank Lending Process: Accounting Information Role in Constructing Realities or Illusions

In the last decades the Bank and finance literature have paid a growing attention to the bank lending process. Considering the different kinds of information, such as hard and soft information, involved in the risk evaluation, contributions to the bank lending literature have highlighted that small banks are better able to collect and act on soft information than large banks. In the bank lending process the risk can be assessed differently among actors, so the communication plays an important role in creating the firm rating evaluation. This paper aims to understand how the accounting information, as a language, could facilitate a successful functioning reality construction or an illusionary one. Drawing on the pragmatic constructivist perspective, which assumes the reality construction as the integration between facts, values, possibilities and communication, we try to understand how the actors integrate their different calculative cultures (calculative idealism and calculative pragmatism) in the bank lending process. In doing so, we carry out two case studies at two small banks operating in the South of Italy. The empirical evidences show how the presence of multiple calculative cultures has entailed disagreement, slowing down the lending process. The integration of the two calculative cultures has been showed underlining their complementarities. This paper contributes to highlight the useful role of the pragmatic constructivist approach to study the problem of the co-presence of different cultures within an organization, explaining how an integration can occur.