This is the accepted version of the paper.This version of the publication may differ from the final published version. Abstract Using a unique data set for a commercial bank in Albania, we analyze gender differences in loan officer performance. Loans screened and monitored by female loan officers have a lower likelihood to turn problematic than loans handled by male loan officers. This effect cannot be explained by borrower or loan officer selection or differences in screening, work load and experience. However, while the performance gap always exists for female borrowers, female loan officers only gain a performance advantage with male borrowers with experience and do not have an advantage with borrowers that are legal entities. We therefore interpret this as suggestive evidence for female loan officers' better capacity to build trust relationships with borrowers. Permanent repository link:

In 2001, government guarantees for savings banks in Germany were removed following a law suit. We use this natural experiment to examine the effect of government guarantees on bank risk taking, using a large data set of matched bank/borrower information. The results suggest that banks whose government guarantee was removed reduced credit risk by cutting off the riskiest borrowers from credit. At the same time, the banks also increased interest rates on their remaining borrowers. The effects are economically large: the Z-Score of average borrowers increased by 7% and the average loan size declined by 13%. Remaining borrowers paid 57 basis points higher interest rates, despite their higher quality. Using a difference-in-differences approach we show that the effect is larger for banks that ex ante benefited more from the guarantee. We show that both the credit quality of new customers improved (screening) and that the loans of existing riskier borrowers were less likely to be renewed (monitoring), after the removal of public guarantees. Public guarantees seem to be associated with substantial moral hazard effects.JEL Classification: G21, G28, G32

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This is the accepted version of the paper.This version of the publication may differ from the final published version. Abstract Using a unique data set for a commercial bank in Albania, we analyze gender differences in loan officer performance. Loans screened and monitored by female loan officers have a lower likelihood to turn problematic than loans handled by male loan officers. This effect cannot be explained by borrower or loan officer selection or differences in screening, work load and experience. However, while the performance gap always exists for female borrowers, female loan officers only gain a performance advantage with male borrowers with experience and do not have an advantage with borrowers that are legal entities. We therefore interpret this as suggestive evidence for female loan officers' better capacity to build trust relationships with borrowers. Permanent repository link: