Papers & Opinions

Banking | Financial development | Political institutions

De Facto Bank Bailouts

Paper

Posted on 7 July 2021

By Phong Ngo

The U.S. government uses its voting power to direct IMF loans to countries where U.S. banks are exposed to sovereign default—a de facto bailout. This effect is stronger in years...
READ MORE

Empirics | Political institutions | Regulation

Financial Policymaking After Crises: Public vs. Private Interests

Paper

Posted on 7 July 2021

By Orkun Saka

We first present a simple model of post-crisis policymaking driven by both public and private interests. Using a novel dataset covering 94 countries between 1973 and 2015, we then establish...
READ MORE

Central banking | Political institutions | Regulation | Special interest politics

Political Economy in Finance

Opinion

Posted on 6 July 2021

By Enrico Perotti

This post reports on recent work presented at the first edition of the CEPR Conference Series on the Political Economy of Finance, which focused on the politics of regulation and...
READ MORE

Central banking | Corporate finance | Political institutions

(Why) Do Central Banks Care About Their Profits?

Paper

Posted on 1 July 2021

By Martin Schmalz

We document that central banks are significantly more likely to report slightly positive profits than slightly negative profits, especially amid greater political pressure, the public’s receptiveness to more extreme political...
READ MORE

Corporate finance | Empirics | Political institutions

Finance and Ideology: The Firm-Level Channels

Paper

Posted on 22 June 2021

By Haikun Zhu

We investigate how politicians’ ideologies affect economic outcomes and financial development through firm-level channels. We explore a unique setting of ideological change in China from Mao’s ideology to Deng’s around...
READ MORE

Central banking | Political institutions | Theory

The Euro as a Diverse Monetary Union

Paper

Posted on 21 May 2021

By Oscar Soons

We analyze the political economy causes and consequences of a monetary unification among countries with different institutional quality. Before a common currency countries with stronger institutions have more efficient public...
READ MORE