Does Political Influence Distort Banking Regulation? Evidence from the US

Giota Papadimitri (), Fotios Pasiouras, Gioia Pescetto and Ansgar Wohlschlegel
Additional contact information
Gioia Pescetto: Portsmouth Business School

No 2018-09, Working Papers in Economics & Finance from University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group

Abstract: This study examines the interplay between political influence and regulatory decisionmaking in the US banking industry. In particular, we assess whether elected officials with power in Congress impact regulatory decision making in the banking industry. Political influence is captured by whether a bank is headquartered in a state where an elected official holds a chair position on a congressional committee related to the banking and financial services industry. As a proxy for regulatory decisions, we take into account formal regulatory enforcement actions issued against US commercial banks over the period 2000-2015. We find an inverse relationship between our political influence variable and enforcement likelihood. In general, the results are robust to the use of alternative model specifications and the restriction of our sample. However, we find that various bank and environmental characteristics are important conditional factors.

Keywords: Political influence; Congressional Committees; Banking supervision; Enforcement actions (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Pages: 48
Date: 2018-10-08
New Economics Papers: this item is included in nep-ban, nep-pol and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://repec.port.ac.uk/EconFinance/PBSEconFin_2018_09.pdf Full text (application/pdf)

Related works:
Journal Article: Does political influence distort banking regulation? Evidence from the US (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pbs:ecofin:2018-09

Access Statistics for this paper

More papers in Working Papers in Economics & Finance from University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group Portsmouth Business School Richmond Building Portland Street Portsmouth PO1 3DE United Kingdom. Contact information at EDIRC.
Bibliographic data for series maintained by Shuonan Zhang ( this e-mail address is bad, please contact ).