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Relationship Banking in the Residential Mortgage Market? Evidence from Switzerland


We examine to what extent mortgage lending is characterized by strong relationships between banks and their borrowers. Our analysis is based on survey data covering all current bank relations for a sample of 1,481 Swiss households out of which 687 have a mortgage. We document that mortgage borrowers maintain significantly more bank relations than comparable households without a mortgage. However, this does not imply that mortgage relations are loose. Comparing mortgage relations to other bank relations of the same households we find that mortgage relations are used for a broader scope of transactions and are held with banks that are located closer to the household. Examining the heterogeneity of mortgage relations across households, we find that financially sophisticated households are less likely to hold their mortgage with a local bank.


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Correspondence to Martin Brown.

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The authors thank an anonymous referee, SJES co-editor Cedric Tille as well as colleagues at the Swiss Institute of Banking and Finance, Christoph Basten, Catherine Koch, Simone Westerfeld and participants at the 2012 International PhD workshop in Finance in Fribourg for valuable comments. We thank Roman Graf for excellent research assistance.

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Brown, M., Hoffmann, M. Relationship Banking in the Residential Mortgage Market? Evidence from Switzerland. Swiss J Economics Statistics 152, 23–48 (2016).

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  • G21
  • D14


  • mortgage loans
  • household finance
  • relationship banking