Relationship banking: What do we know?

This paper briefly reviews the contemporary literature on relationship banking. We start our with a discussion of the raison d'etre of banks in the context of the financial intermediation literature. From there we discuss how relationship banking fits into the core economic services provided by banks and point at its costs and benefits. This leads to an examination of the interrelationship between the competitive environment and relationship banking as well as a discussion of the empirical evidence. Journal of Economic Literature Classification Numbers: G20,G21,L10. (C) 2000 Academic Press.