This paper investigates how cross-selling affects relationship lending using internal data from a large bank and the Swedish credit registry. I show that within a bank-firm relationship, profit earned from non-loan products cross-subsidizes loans and increases (1) credit supply and (2) the likelihood of the bank’s pausing or waiving interest payments for delinquent loans (lenience in delinquency). For identification, I exploit the Basel II-induced exogenous variation in products’ profitability while holding constant the firm’s creditworthiness and relationship informativeness. I find that the average affected firm experienced a decrease of 6% ($400,000) in credit supply and 30% (9.8 pp) in lenience in delinquency. The results highlight the importance of cross-subsidization as a mechanism through which cross-selling affects bank-firm relationships and inform optimal regulatory design for lenders who multi-produce.

中文翻译：

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大银行：交叉销售如何影响贷款？

本文利用大型银行和瑞典信用登记处的内部数据，研究交叉销售如何影响关系贷款。我表明，在银行与企业的关系中，从非贷款产品中赚取的利润可以交叉补贴贷款，并增加（1）信贷供应和（2）银行暂停或免除拖欠贷款利息支付的可能性（对拖欠行为的宽大处理） 。为了进行识别，我利用了巴塞尔协议 II 引起的产品盈利能力的外生变化，同时保持公司的信誉度和关系信息不变。我发现受影响的公司平均信贷供应量减少了 6%（400,000 美元），拖欠宽大处理减少了 30%（9.8 个百分点）。