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

Paola Morales-Acevedo () and Steven Ongena

No 1513, BAFFI CAREFIN Working Papers from BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy

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 in conditions of the loans granted after a robbery compared to changes in loan conditions that occur contemporaneously at unaffected branches. In general loan officers seem to adopt so-called avoidance behaviour. In accordance with the literature on posttraumatic stress their avoidance behavior is halved within two weeks after the robbery and the effect further varies depending on the presence 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: 39 pages
Date: 2016
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 (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:baf:cbafwp:cbafwp1513

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