Lobbying on Regulatory Enforcement Actions: Evidence from Banking

Thomas Lambert

No 16-017, Working Papers CEB from ULB -- Universite Libre de Bruxelles

Abstract: This paper analyzes the relationship between bank lobbying and supervisory decisions of regulators, and documents its moral hazard implications. Exploiting bank-level information on the universe of commercial and savings banks in the United States, I find that regulators are less likely to initiate enforcement actions against lobbying banks. In addition, I show that lobbying banks are riskier and reliably underperform their non-lobbying peers. Overall, these results appear rather inconsistent with an information-based explanation of bank lobbying, but consistent with the theory of regulatory capture.

Keywords: Banking supervision; enforcement actions; lobbying; moral hazard; risk taking (search for similar items in EconPapers)
JEL-codes: D72 G21 G28 (search for similar items in EconPapers)
Pages: 52 p.
Date: 2016-03-15
New Economics Papers: this item is included in nep-ban and nep-cba
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Related works:
Working Paper: Lobbying on Regulatory Enforcement Actions: Evidence from Banking (2015)
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