Carletti, Elena; Cerasi, Vittoria; Daltung, Sonja - Dipartimento di Statistica, Università degli Studi di … - 2006
This paper analyzes the optimality of multiple-bank lending, when firms and banks are subject to moral hazard and monitoring is essential. Multiple-bank lending leads to higher per-project monitoring whenever the benefit of greater diversification dominates the costs of free-riding and...