As borrowing rates climb to record highs, one could say that consumers and their banks have never been closer. Generally, we consider these ties to be very formal, with banks and consumers connected only at arm’s length.
Yet in many settings, lenders and borrowers do develop personal relationships. For example, small business owners establish personal relationships with bankers in an effort to secure loans, and lenders build personal relationships with borrowers as a way of gaining access to private information that may affect loan repayment.