About

The CERBE (Center for Relationship Banking and Economics) aims to develop avenues of research and training in order to better understand and promote the importance of relational goods as a means to overcome a simple Laissez-faire approach that too often led to a kind of idolatry of the market, with a setting focusing on the purely contractual explicit aspects of the economy and overlooking the dimension of the human person.

The Great Depression that hit all the rich countries since 2008 and is still gripping much of Europe testifies to the failure of the prevailing economic model, that of the individualistic Anglo-American capitalism. The core of this model, especially in its extreme variant of financial capitalism of the past decades, builds on an explicitly "contractualist" approach, according to which individuals should be concerned exclusively to pursuing the maximization of their own utility, while the collective well-being should be ensured by the operation of Adam Smith’s "invisible hand". In fact, the pure contractualist approach does not take into account that markets are too often incomplete, so that the trading system can stall. Just think of the labor market, where in southern Europe almost every second young person is now unemployed, or the credit market, in which the increased risk and the fragility of banks often make it impossible for companies and families to obtain financing. In other words, the size of the market and its operation depend on their context and they need to be fed by mechanisms that favor the creation of trust, thus making it possible to accomplish exchanges that would otherwise not be achievable. It is at this juncture that relational goods acquire a fundamental role.

Although there are many others, the two segments in which scholars have long since recognized the existence of situations of "market failure" are the credit market and the labor market. In view of this, we intend to devote an important part of the initiatives of CERBE to the credit market, studying the theme of Relationship Banking (RB). Some traits to be drilled in the research include: i) the degree to which RB helps to reduce credit rationing to the households unable to provide collateral and to companies which, although equipped with good prospects, are opaque in the eyes of the banks; ii) the extent to which RB is associated with different types of banks in terms of company ownership (e.g., Plc banks vs . cooperative banks, savings banks and micro-credit financial institutions, where the goal is to maximize the profit for the first while that of the latter is to serve members and/or the community of reference), and/or in terms of business models (e.g., retail vs. wholesale models), and/or in terms of governance structures (e.g., structures with centralized decision-making power vs. more democratic structures); iii) the links between RB, the organization of the bank and its ability to use hard information (quantitative data from companies’ profit/loss accounts, etc.) or soft information (mainly qualitative in nature, but also crucial in gauging the risk class of the borrower); iv) the role of regulation in determining the use of RB by banks.

In contrast to the pure contractualist approach, the common denominator of the RB model is its reliance on human relationships and personal relationships that build trust, and include rather than exclude, allowing you to operate on the basis of "implicit" contracts, allow to overcome market failures bringing the credit where it would not get otherwise.

Moreover, it is easy to understand how relational goods do not constitute a possible cure only in the credit market, but can help create well-being and happiness in other segments of the socio-economy, as already evidenced by a large theoretical and empirical literature. Nowadays, mainstream economics is totally focused on the individual and sees social relations only instrumentally. In reality, from observation of daily life in and out of the markets and from what since decades the other social sciences and psychology tell us, the human requires relational symbolic and emotional needs that cannot be captured by an individualistic and instrumental paradigm. The organizational dynamics of the well being at work, the choice to stay or leave a job in a company, certainly depend on incentives and contracts, but also from these relational, affective and emotional elements, that the literature on relational goods is dealing with, without being listened to by mainstream economics. One of CERBE’s purposes is contributing to increase the attention to these issues with the research and the dissemination of ideas.