Cross-selling lending and underwriting : scope economies and incentives

  • We highlight the implications of combining underwriting services and lending for the choice of underwriters and for competition in the underwriting business. We show that cross-selling can increase underwriters’ incentives, and we explain three phenomena: first, that cross-selling is important for universal banks to enter the investment banking business; second, that cross-selling is particularly attractive for highly leveraged borrowers; third, that less-than-market rates are no prerequisite for cross-selling to benefit a bank’s clients. In our model, cross-selling reduces rents in the underwriting business.

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Author:Christian LauxORCiDGND, Uwe WalzORCiDGND
Parent Title (English):Review of finance
Publisher:Oxford University Press
Place of publication:Oxford
Document Type:Article
Date of Publication (online):2009/06/17
Year of first Publication:2008
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2009/06/17
Tag:D49; G21; G24
Page Number:27
First Page:341
Last Page:367
© The Author 2008. This is an Open Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License ( which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.
Source:Review of Finance (2009) 13: 341–367 ; doi:10.1093/rof/rfn027
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoCreative Commons - Namensnennung-Nicht kommerziell 2.0