Commercial banks getting underwriting business: Tying or business building?

► I analyze how commercial banks can use loans to attract underwriting business. ► Banks give more credit and lower spreads when they have underwriting ability. ► Banks that continue business relations are more likely to get underwriting business. ► The evidence does not support recent concerns of coercive “tying” behavior by banks. ► Evidence suggests that banks use discounted lending to attract underwriting business.