This paper briefly reviews the contemporary literature on relationship banking. We start out with a discussion of the raison d'être of banks in the context of the financial intermediation literature. From there we discuss how relationship banking fits into the core economic services provided by banks and point at its costs and benefits. This leads to an examination of the interrelationship between the competitive environment and relationship banking as well as a discussion of the empirical evidence. Journal of Economic Literature Classification Numbers: G20, G21, L10.

This paper argues that audit firms achieve competitive advantages through specialization, and that clients purchase audit services from the least cost supplier. Client-auditor realignments thus represent efficient responses to changes in client operations and activities over time. Results obtained from analyzing the financial characteristics and share price performance of corporations that changed auditors between 1973 and 1982 support the view that realignments can generally be attributed to cross-temporal changes in client characteristics and differences in audit firm cost structures.

Journal Article Sceptical Notes on Uzawa's “Optimal Growth in a Two-Sector Model of Capital Accumulation”, and a Precise Characterization of the Optimal Path Get access W. Haque W. Haque University of Toronto Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 37, Issue 3, July 1970, Pages 377–394, https://doi.org/10.2307/2296727 Published: 01 July 1970 Article history Received: 01 May 1967 Revision received: 01 November 1969 Published: 01 July 1970

Journal Article The Core of an Economy with a Measure Space of Economic Agents Get access W. Hildenbrand W. Hildenbrand University of California, Berkeley, U.S.A., Studiengruppe für Systemforschung, Heidelberg, Germany Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 35, Issue 4, October 1968, Pages 443–452, https://doi.org/10.2307/2296771 Published: 01 October 1968

Journal Article A Note on Variable Prices and Foreign Trade Multipliers Get access W. Beckerman W. Beckerman Paris Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 21, Issue 2, 1953, Pages 162–164, https://doi.org/10.2307/2296008 Published: 01 January 1953

The evidence in this paper suggests that downgrades by both Moody's and Standard and Poor's are associated with negative abnormal stock returns in the two-day window beginning the day of the press release by the rating agency. Significant negative abnormal performance can still be detected after eliminating observations containing obvious concurrent (potentially contaminating) news releases. There is little evidence of abnormal performance on announcement of an upgrade. Significant abnormal returns are associated with announcements of additions to the Standard and Poor's Credit Watch List, if either a potential downgrade or a potential upgrade is indicated.

In recent years, mergers, acquisitions and organic growth have meant that some of the largest and most complex financial groups have come to transcend national boundaries and traditionally defined business-lines. As a result, they have become a potential channel for the cross-border and cross-market transmission of financial shocks. This paper analyses the degree of comovement in the equity prices of a selected group of large complex financial institutions (LCFIs), and assesses the extent to which movements are driven by common factors. A relatively high degree of commonality is found for most LCFIs although there are still noticeable divisions between sub-groups of LCFIs, both according to geography and to a lesser extent primary business-line.

A number of recent policy initiatives have called for enhanced transparency of banking firms. While the hope is that enhanced transparency may improve incentives ex ante, it is less clear whether transparency is necessarily a good thing ex post, when a bank might have hit hard times and provision of information could have a destabilising effect. This paper provides a synopsis of these different effects and provides some new, bank-level evidence in an attempt to clarify empirically whether, taking ex ante and ex post effects together, transparency is likely to reduce or increase bank stability. The analysis suggests that, on balance, transparency reduces the chance of severe banking problems and thus enhances overall financial stability.

This paper examines the effect of a regulatory action (the Home Valuation Code of Conduct) that was designed to reduce the incidence of inflated collateral valuations. We identify the impact of the regulation using a difference-in-difference identification strategy. Our baseline results confirm that the regulation reduced inflated valuations in refinance transactions by 16% in the large lender sample, compared to small lenders and a placebo sample. The effect is most significant in low-liquidity and low-distress markets, but not in other markets. We find that the regulation had a significant impact on loan to value ratio and interest rate, and it also led to a significant increase in defaults but a decrease in prepayments.

The income maintenance experiments have received renewed attention due to growing international interest in a basic income. Proponents of a negative income tax (NIT) viewed it as a replacement for traditional welfare with stronger work incentives. However, existing labor supply estimates for single mothers (those eligible for welfare) are uniformly negative. We reassess the experimental evidence and find randomization failure in two NITs (Gary and Seattle). In Denver and Manitoba, we find positive labor supply responses for those on welfare before random assignment. Our results provide strong evidence that an NIT can increase work activity among single mothers on welfare.