Political Cycles in Bank Lending to the Government

• 成果类型: Article
• 署名作者: Koetter, Michael; Popov, Alexander
• 署名单位: Otto von Guericke University; Deutsche Bundesbank; European Central Bank
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhaa118
• 发表日期: 2021
• 页码: 3138
• 关键词: Sovereign debt crisis; MORAL SUASION; OWNERSHIP; ELECTIONS; deregulation; performance; connections; failures; default; finance

摘要

We study how political party turnover after German state elections affects banks' lending to the regional government. We find that between 1992 and 2018, party turnover at the state level leads to a sharp and substantial increase in lending by local savings banks to their home-state government. This effect is accompanied by an equivalent reduction in private lending. A statistical association between political party turnover and government lending is absent for comparable cooperative banks that exhibit a similar regional organization and business model. Our results suggest that political frictions may interfere with government-owned banks' local development objectives.