TY  - RPRT
A1  - Behr, Patrick
A1  - Drexler, Alejandro
A1  - Gropp, Reint
A1  - Güttler, André
T1  - Financial incentives and loan officer behavior
N2  - In this paper, we investigate the implications of providing loan officers with a compensation structure that rewards loan volume and penalizes poor performance. We study detailed transactional information of more than 45,000 loans issued by 240 loan officers of a large commercial bank in Europe. We find that when the performance of their portfolio deteriorates, loan officers shift their efforts towards monitoring poorly-performing borrowers and issue fewer loans. However, these new loans are of above-average quality, which suggests that loan officers have a pecking order and process loans only for the very best clients when they are under time constraints.
KW  - loan officer
KW  - incentives
KW  - monitoring
KW  - screening
KW  - loan origination
Y1  - 2013
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/34787
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-347879
UR  - http://siteresources.worldbank.org/INTFR/Resources/DrexlerloanofficerincentivesNov5AD.docx
IS  - this version: Nov 5, 2013
ER  -