This paper shows that non-banks curtail their syndicated credit by significantly
more than banks during crises, even after accounting for time-varying lender and
borrower characteristics. We provide novel evidence that differences in the value of
lending relationships explain most of the gap: unlike for banks, relationships with
non-banks – whether measured by duration or intensity – do not improve borrowers’
access to credit during crises. The rise of non-banks could therefore lead to a shift
from relationship towards transaction lending and exacerbate the repercussions of
financial crises.