Banks' Lobbying Determinants: Insights from the GFC and the Trump Presidency

Banks' Lobbying Determinants: Insights from the GFC and the Trump Presidency

Rajna Gibson Brandon, Alper Odabasioglu

Series number :

Serial Number: 
784/2021

Date posted :

September 10 2021

Last revised :

September 10 2021
SSRN Share

Keywords

  • banking • 
  • deregulation • 
  • Dodd-Frank bill • 
  • Global Financial Crisis • 
  • Lobbying • 
  • networks • 
  • Trump Presidency • 
  • Volcker Rule

This study examines the relationship between banks' main financial and business characteristics and their lobbying intensity during the last two decades. A novel feature of our analysis is that we adopt a network perspective to measure banks' lobbying intensity.

We find that banks are more likely to lobby when they are larger, less creditworthy, venture into non-traditional businesses and face higher agency conflicts. Next, we observe that subsequent to the GFC and with the announcement of the Dodd-Frank bill, there was a significant increase in lobbying undertaken by banks with higher revenues stemming from trading and securitization. Finally, during the Trump Presidency, banks with higher trading revenues lobbied significantly more.

Authors

Mr.
Real name:
Alper Odabasioglu
Bank of Canada, and London School of Economics