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Bank Switching in Portugal

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  • Gil Nogueira

Abstract

Using the population of firm-bank exposures from 2007 to 2014, bank switching in Portugal is studied. A firm is said to switch from the inside bank to the outside bank when it establishes a soft information relationship with the outside bank. It is found that the probability with which firms switch banks is related to macroeconomic, firm, bank, and firm-bank relationship factors previously studied in the banking literature. The probability of switching is procyclical, and firms are more likely to switch from worse capitalized banks. Firms are more likely to switch if they have greater turnover, lower return on assets, are less opaque or are growing faster. Firms are also more likely to switch when they have longer bank relationships or a greater number of bank relationships. Riskier firms are more likely to switch and maintain their exposure to the financial system, while safer firms are more likely to switch and increase their exposure to the financial system

Suggested Citation

  • Gil Nogueira, . "Bank Switching in Portugal," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    • Handle: RePEc:ptu:bdpart:r201612
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    References listed on IDEAS

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