Eugene William Stetson (December 5, 1881 – July 20, 1959) was an American banker and corporate executive who served as president and later chairman of the Guaranty Trust Company of New York, one of the largest financial institutions in the United States. A prominent practitioner of what became known as "relationship banking," Stetson combined commercial banking with sustained participation in the management of client companies. His career connected Wall Street finance with the development of several major American corporations, most notably The Coca-Cola Company, the Illinois Central Railroad, and the Southern Company.
In 1919, Stetson helped structure and finance the acquisition of Coca-Cola from the family of Asa Griggs Candler. He became one of the trustees controlling the reorganized corporation and remained a Coca-Cola board director for approximately forty years. At the Illinois Central, he helped direct a long-term program of debt reduction, refinancing, and physical rehabilitation that was credited with saving the railroad from probable bankruptcy during and after the Great Depression. Stetson also performed public and wartime service. During World War II, he served on the advisory board of the New York Ordnance District, assisted American Red Cross war-fund campaigns, and promoted the purchase of United States defense bonds.
In 1950, President Harry S. Truman appointed Stetson to the board of the federal Commodity Credit Corporation.
William Algernon Sydney Smoot (March 12, 1845 – February 18, 1886), commonly known as William Sydney Smoot or W. S. Smoot, was an American inventor, mechanical engineer, ordnance officer, and industrial executive. He served in the Union Army during the American Civil War, worked for E. Remington and Sons, and designed the series of pocket handguns commonly called the Remington–Smoot revolvers.
After becoming superintendent of Remington's manufacturing department, Smoot left the firearms business to become the second president of the Western Electric Company in January 1885. He remained president until his death in February 1886.
Haakon Ingolf "H. I." Romnes (March 2, 1907 – November 19, 1973) was an American electrical engineer and telecommunications executive. He spent his entire working career in the Bell System, beginning as an engineer at Bell Telephone Laboratories in 1928 and eventually serving as chairman and chief executive officer of the American Telephone and Telegraph Company from 1967 until 1972.
As a young Bell engineer, Romnes worked on long-distance circuits and radio-telephone technology. He and R. R. O'Connor described the Bell System's early general mobile telephone network in a 1947 engineering paper, and AT&T later identified him as a member of the team whose work led to the first commercial mobile telephone call in 1946.
Romnes subsequently held senior engineering, operating and manufacturing posts, including chief engineer of AT&T, vice president for operations, president of Western Electric, vice chairman of AT&T and president of AT&T. As chief executive, he led what was then one of the world's largest corporations during a period of rapid technological change, deteriorating telephone service in several metropolitan areas, major labor disputes, federal rate regulation and increasing competition in telecommunications equipment and data transmission.
Relationship banking is a banking model in which a financial institution develops a continuing, often long-term association with a customer in order to obtain customer-specific information and provide multiple financial services. In academic literature, the related term relationship lending usually refers more narrowly to lending decisions based substantially on information accumulated through repeated interactions between a lender and borrower.
Under relationship banking, a bank may acquire proprietary information through loans, deposit accounts, payment activity, cash-management services, financial advice, and direct contact with a firm's owners, employees, suppliers, and customers. Much of this information is described as soft information because it is qualitative, difficult to verify, and not readily transferable outside the organization collecting it. Relationship banking is therefore commonly contrasted with transaction banking or arm's-length lending, which relies more heavily on standardized financial statements, collateral values, credit scores, market prices, and other quantifiable information.
Relationship banking is especially associated with small and medium-sized enterprises (SMEs), family-owned firms, agricultural borrowers, and other customers whose prospects cannot be assessed completely from audited accounts or market information. It has also been practiced in corporate banking, investment banking, consumer finance, and interbank markets.
Research has identified potential benefits including greater credit availability, more effective monitoring, flexible loan renegotiation, intertemporal smoothing of borrowing costs, and continued financing during temporary distress. Its potential disadvantages include higher operating costs, customer lock-in, informational monopoly, conflicts of interest, favoritism, reduced competition, excessive continuation of loans to unproductive firms, and vulnerability when a borrower's principal bank becomes distressed.