Banking

    Papers & Opinions

    Banking | Empirics | Financial markets | Regulation

    Bank Lobbying as a Financial Safety Net

    Paper

    Posted on 4 November 2024

    By Kentaro Asai

    I argue creditors, plausibly considering the link between bank lobbying and government bailouts, reflect the financial-safety-net aspect of bank lobbying. My structural estimation based on U.S. data suggests bank lobbying...
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    Banking | Corporate finance | Electoral politics | Empirics | Financial markets | Media | Political institutions

    Political Polarization and Finance

    Paper

    Posted on 5 August 2024

    By Elisabeth Kempf

    We review an empirical literature that studies how political polarization affects financial decisions. We first discuss the degree of partisan segregation in finance and corporate America, the mechanisms through which...
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    Banking | Empirics | Regulation

    The Implementation of Central Bank Policy in China

    Paper

    Posted on 27 November 2023

    By Yushi Peng

    We examine the roles of commercial bank ownership and CEO faction membership in facilitating or in hindering the implementation of central bank policy in China. Both ownership and membership matter:...
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    Banking | Central banking | Empirics

    Connected Lending of Last Resort

    Paper

    Posted on 9 February 2023

    By Kris Mitchener

    Because of secrecy, little is known about the political economy of central bank lending. Utilizing a novel, hand-collected historical daily dataset on loans to commercial banks, we analyze how personal...
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    Banking | Electoral politics | Theory

    Bailouts by Popular Demand

    Paper

    Posted on 4 August 2022

    By Stylianos Papageorgiou

    We characterize conditions under which the majority of voters supports a bailout despite incurring bailout expenditures. This yields inefficiently high investments when economic prospects are good. When economic prospects are...
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    Banking | Empirics | Special interest politics

    Winning Connections? Special Interests and the Sale of Failed Banks

    Paper

    Posted on 16 March 2022

    By Deniz Igan

    We study how banks’ special interests affect the resolution of failed banks. Using a sample of FDIC auctions between 2007 and 2016, we find that bidding banks that lobby regulators...
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    Banking | Empirics | Political institutions

    Bailouts and Political Connections of Bank Boards

    Paper

    Posted on 17 January 2022

    By Pia Huettl

    This paper investigates the political ties of too-big-to-fail bank boards in crisis times. We argue that after a bailout, governments are likely to influence bank board compositions to secure control...
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    Banking | Empirics | Special interest politics

    The Politics of the Paycheck Protection Program

    Paper

    Posted on 8 December 2021

    By Thomas Lambert

    This paper examines the incidence of special interests in the allocation of loans through the Paycheck Protection Program (PPP). We find that lobbying at the firm and industry levels helps...
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    Banking | Special interest politics | Theory

    Bank Influence at a Discount

    Paper

    Posted on 8 November 2021

    By Stylianos Papageorgiou

    In a general equilibrium framework, we study the cost incurred by banks to ''buy" influence on capital regulation via campaign contributions. Our central result is that banks buy influence at...
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    Banking | Central banking | Electoral politics | Empirics | Political institutions

    Central Banks in Parliaments

    Paper

    Posted on 10 October 2021

    By Nicolo Fraccaroli

    This paper investigates whether parliamentary hearings are effective in holding central banks accountable against their mandates. To this end, it applies text analysis on the hearings of the Bank of...
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    Banking | Corporate finance | Electoral politics | Financial markets

    Does Political Partisanship Cross Borders? Evidence from International Capital Flows

    Paper

    Posted on 4 October 2021

    By Elisabeth Kempf

    Does partisan perception shape the flow of international capital? We provide evidence from two settings, syndicated corporate loans and equity mutual funds, to show that ideological alignment with foreign governments...
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    Banking | Electoral politics | Empirics | Political institutions

    The Costs of Political Misalignment: Forest Fires and Bank Loans in Turkey

    Opinion

    Posted on 16 September 2021

    By Orkun Saka

    Recent wildfires in Turkey have not only destroyed more than 95,000 hectares of its coastal forestland but also divided the country further into its political colors. This piece discusses the...
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    Banking | Empirics | Regulation

    Aspects of the Political Economy of the European Banking Union

    Opinion

    Posted on 6 September 2021

    By Lena Tonzer

    The regulatory architecture of the financial system has significantly changed after the global financial crisis of 2008/09. In Europe, the introduction of the Single Rulebook has been a major change...
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    Banking | Central banking | Theory

    Monetary Policy with Reserves and CBDC: Optimality, Equivalence, and Politics

    Paper

    Posted on 11 August 2021

    By Dirk Niepelt

    We analyze the introduction of retail central bank digital currency (CBDC) into a two-tiered monetary system. Deposits, reserves, and CBDC differ in terms of operating costs and liquidity. We identify the optimal...
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    Banking | Electoral politics | Empirics

    Lending Cycles and Real Outcomes: Costs of Political Misalignment

    Paper

    Posted on 30 July 2021

    By Orkun Saka

    We document a strong political cycle in bank credit and industry outcomes in Turkey. In line with theories of tactical redistribution, state-owned banks systematically adjust their lending around local elections...
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