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Lobbying and lending by banks around the financial crisis by

Despite the unprecedented levels of liquidity provided by the Federal Reserve to banks during the 2007–2008 financial crisis, lending by banks slowed dramatically during and after that global episode. In this study, we propose that, given capital constraints, the lobbying expenditures by banks to co...

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Detalles Bibliográficos
Autores principales: Blau, ByBenjamin M., Griffith, Todd G., Whitby, Ryan J.
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Springer US 2022
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9441017/
https://www.ncbi.nlm.nih.gov/pubmed/36091083
http://dx.doi.org/10.1007/s11127-022-00991-5
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author Blau, ByBenjamin M.
Griffith, Todd G.
Whitby, Ryan J.
author_facet Blau, ByBenjamin M.
Griffith, Todd G.
Whitby, Ryan J.
author_sort Blau, ByBenjamin M.
collection PubMed
description Despite the unprecedented levels of liquidity provided by the Federal Reserve to banks during the 2007–2008 financial crisis, lending by banks slowed dramatically during and after that global episode. In this study, we propose that, given capital constraints, the lobbying expenditures by banks to combat Dodd-Frank might have crowded out lending activity. A variety of univariate and multivariate tests show that while lending by banks fell significantly around the financial crisis, lobbying rose dramatically. Our results also show that bank lobbying and lending are imperfect substitutes during non-crisis periods. Such substitutability likely is explained by the value perceived in the political connections gained through lobbying, such as the ability to influence regulation, preferential treatment on supervisory or enforcement decisions, and protection against adverse shocks in the form of government bailouts.
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spelling pubmed-94410172022-09-06 Lobbying and lending by banks around the financial crisis by Blau, ByBenjamin M. Griffith, Todd G. Whitby, Ryan J. Public Choice Article Despite the unprecedented levels of liquidity provided by the Federal Reserve to banks during the 2007–2008 financial crisis, lending by banks slowed dramatically during and after that global episode. In this study, we propose that, given capital constraints, the lobbying expenditures by banks to combat Dodd-Frank might have crowded out lending activity. A variety of univariate and multivariate tests show that while lending by banks fell significantly around the financial crisis, lobbying rose dramatically. Our results also show that bank lobbying and lending are imperfect substitutes during non-crisis periods. Such substitutability likely is explained by the value perceived in the political connections gained through lobbying, such as the ability to influence regulation, preferential treatment on supervisory or enforcement decisions, and protection against adverse shocks in the form of government bailouts. Springer US 2022-09-04 2022 /pmc/articles/PMC9441017/ /pubmed/36091083 http://dx.doi.org/10.1007/s11127-022-00991-5 Text en © The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2022, Springer Nature or its licensor holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law. This article is made available via the PMC Open Access Subset for unrestricted research re-use and secondary analysis in any form or by any means with acknowledgement of the original source. These permissions are granted for the duration of the World Health Organization (WHO) declaration of COVID-19 as a global pandemic.
spellingShingle Article
Blau, ByBenjamin M.
Griffith, Todd G.
Whitby, Ryan J.
Lobbying and lending by banks around the financial crisis by
title Lobbying and lending by banks around the financial crisis by
title_full Lobbying and lending by banks around the financial crisis by
title_fullStr Lobbying and lending by banks around the financial crisis by
title_full_unstemmed Lobbying and lending by banks around the financial crisis by
title_short Lobbying and lending by banks around the financial crisis by
title_sort lobbying and lending by banks around the financial crisis by
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9441017/
https://www.ncbi.nlm.nih.gov/pubmed/36091083
http://dx.doi.org/10.1007/s11127-022-00991-5
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