Relational borrowing is a business relationship wherein a lender collects information on the creditworthiness of a borrower on the basis of long-term investments, types of products, and other interactions with the borrower. In addition, relational borrowing refers to the situation wherein a client gets better/preferential rates because of a long-standing relationship with the lender. In the literature, the practice is questioned, that is, whether the risk has been assessed appropriately in such a situation. On the macroeconomic level, Germany and Japan are believed to have relationship-based financial systems, where creditors, as opposed to shareholders in the predominantly Anglo-Saxon economies, have a major impact on economic development. Through proxy voting, German banks accumulate most of the voting rights and represent important blockholders at general shareholder meetings. ...