Good News for Some Banks

Good News for Some Banks

Renée Adams

Series number :

Serial Number: 
502/2017

Date posted :

February 28 2017

Last revised :

April 08 2017
SSRN Share

Keywords

  • Federal Reserve • 
  • Director • 
  • Banks • 
  • conflicts of interest • 
  • Political Connection • 
  • Reputation • 
  • insider trading • 
  • Enforcement Actions • 
  • regulatory capture

Bankers are directors of Federal Reserve Banks.

I document that a) banker directors of the New York Fed attend more meetings about the financial sector; b) elections for Reserve Bank directorships are more contested for bankers, but less so for large banks and American Banking Association directors; c) the market reaction to bankers’ elections to Reserve Bank boards is 1%; d) the market reaction to insider purchases is 1.3% higher when banker directors are on a Reserve Bank board; e) Fed enforcement actions appear more moderate for banker directors. Reserve Bank directorships appear to be good news for some banks.

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