Fear, Anger and Credit. On Bank Robberies and Loan Conditions

Paola Morales-Acevedo () and Steven Ongena

No 19-42, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: We study the impact of emotions on real-world decisions made by loan officers by analyzing the loan conditions of loans granted immediately after a bank branch robbery. We find significant differences between the conditions of loans granted after a robbery and changes in loan conditions that occur contemporaneously at unaffected branches. In general, loan officers seem to adopt so-called avoidance behavior. In accordance with the literature on posttraumatic stress, their avoidance behavior is halved within two weeks following the robbery and the effect further varies depending on the presence, or absence, of a firearm during the robbery.

Keywords: behavioural finance; bank robberies; transactional versus relationship lending (search for similar items in EconPapers)
JEL-codes: G02 G2 (search for similar items in EconPapers)
Pages: 91 pages
Date: 2019-06
New Economics Papers: this item is included in nep-ban
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Related works:
Journal Article: FEAR, ANGER, AND CREDIT. ON BANK ROBBERIES AND LOAN CONDITIONS (2020)
Working Paper: Fear, Anger and Credit. On Bank Robberies and Loan Conditions (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp1942

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