Interpersonal versus interbank lending networks: The role of intermediation in risk-sharing

Core-periphery; Financial exclusion; Intermediation; Liquidity management; Reciprocity; Risk-sharing; Business and International Management; Economics and Econometrics

Abstract :

[en] Analyzing the interpersonal lending network of a Hungarian village in a disadvantaged region, we find strong intermediary activity and a tiered core-periphery structure. We show that the main motive behind lending is not altruism or profit-seeking, but risk-sharing which is the most accentuated in poor-to-poor and Roma-to-Roma relations. Comparing this informal lending market to a formal interbank market, we find more similarities than differences. In both markets, intermediation is a key element in risk-sharing and an effective tool to cope with liquidity risk. Regulatory and development policies should respect the existing institutions of risk-sharing.

Disciplines :

Finance

Author, co-author :

BERLINGER, Edina ; University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Department of Finance (DF) ; Department of Finance, Corvinus University of Budapest, Budapest, Hungary

Gosztonyi, Márton; Asia-Europe Institute, Universiti Malaya, Kuala Lumpur, Malaysia

Havran, Dániel; Department of Finance, Corvinus University of Budapest, Budapest, Hungary

Pollák, Zoltán; Department of Finance, Budapest Business School University of Applied Sciences, Budapest, Hungary

External co-authors :

yes

Language :

English

Title :

Interpersonal versus interbank lending networks: The role of intermediation in risk-sharing

Publication date :

March 2023

Journal title :

Emerging Markets Review

ISSN :

1566-0141

eISSN :

1873-6173

Publisher :

Elsevier B.V.

Volume :

Pages :

100989

Peer reviewed :

Peer Reviewed verified by ORBi

Additional URL :

https://api.elsevier.com/content/article/PII:S1566014122001066?httpAccept=text/xml

Funders :

Nemzeti Kutatási Fejlesztési és Innovációs Hivatal
Ministry of Human Capacities

Funding text :

This research was supported by the Higher Education Institutional Excellence Program of the Ministry of Human Capacities in the framework of the ‘Financial and Public Services’ research project ( NKFIH-1163-10/2019 ) at Corvinus University of Budapest. Edina Berlinger and Daniel Havran thank funding from National Office for Research, Development and Innovation - NKFIH , K-138826 . The authors are grateful to the National Bank of Hungary for the database of the interbank deposit market.This research was supported by the Higher Education Institutional Excellence Program of the Ministry of Human Capacities in the framework of the ‘Financial and Public Services’ research project (NKFIH-1163-10/2019) at Corvinus University of Budapest. Edina Berlinger and Daniel Havran thank funding from National Office for Research, Development and Innovation - NKFIH, K-138826. The authors are grateful to the National Bank of Hungary for the database of the interbank deposit market.

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