Is bank lending corruption self-regulatory? A note

Erotokritos Varelas

Discussion Paper Series from Department of Economics, University of Macedonia

Abstract: This short article puts forward the possibility that bank-client corruption tends to raise lending rates. If it does and if bank-official corruption counteracts this tendency, bank lending corruption might be seen as a self-regulatory phenomenon, having little if none at all influence on the real economy. An anti-lending-corruption policy is deemed to be necessary only under a zero-lower -bound associated monetary policy and in any case, it should treat the two types of banking-sector corruption symmetrically. The negative effects of bank sector fraud on economic growth should be related to the large volume of cybercrime and money laundering rather than to fraud surrounding bank lending.

Keywords: Bank lending corruption; Bank non-lending fraud; Economic activity. (search for similar items in EconPapers)
JEL-codes: D21 D73 E43 (search for similar items in EconPapers)
Date: 2017-03, Revised 2017-03
New Economics Papers: this item is included in nep-mac
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