Using microdata from France, we provide novel evidence that salience shapes banks’ lendingdecisions. Information about borrowers’ payment defaults in trade bills is publicly availableto all banks, but it appears more prominently to the bank managing the payment transaction(i.e., the reporting bank). We show that the reporting bank reduces lending to a defaultingborrower more than non-reporting lenders. This effect persists when non-reporting bankshave incentives to monitor payment default information routinely, and when reporting andnon-reporting banks hold the same private information on the borrower. We conclude thatinformational gaps between banks cannot explain our findings and the reporting-bank effectwe document hinges precisely on information salience.

The seminar will be held both in presence and online @ this link