We study the impact of transparency about banks’ costs on loan interest rates. The Indian Central Bank required banks to disclose a cost-based benchmark interest rate instead of the prime rate. The banks could price loans using any spread to the cost-based benchmark. We find that this change, which made banks’ cost structures more transparent, lowers the interest rates charged and leads to increases in debtor firms’ total borrowings and investments. We hypothesize that increased cost transparency reveals relationship rents to competitor banks and makes it difficult for incumbent banks to maintain high relationship rents because of increased threat of entry.

中文翻译：

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银行借贷成本的透明度是否会降低企业的借贷成本？来自印度的证据


我们研究银行成本透明度对贷款利率的影响。印度央行要求银行披露基于成本的基准利率，而不是优惠利率。银行可以使用基于成本的基准的任何利差来定价贷款。我们发现，这种变化使银行的成本结构更加透明，降低了利率，并导致债务人公司的总借款和投资增加。我们假设，成本透明度的提高揭示了竞争对手银行的关系租金，并且由于进入威胁的增加而使现有银行难以维持较高的关系租金。