Lobbying on Regulator Enforcement Actions: Evidence from US Commercial and Savings Banks

• 成果类型: Article
• 署名作者: Lambert, Thomas
• 署名单位: Erasmus University Rotterdam - Excl Erasmus MC; Erasmus University Rotterdam
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2017.2895
• 发表日期: 2019
• 页码: 2545-2572
• 关键词: banking supervision; enforcement actions; lobbying; regulatory capture; risk taking

摘要

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 44.7% less likely to initiate enforcement actions against lobbying banks. This result is robust across measures of lobbying and accounts for endogeneity concerns by employing instrumental variables strategies. In addition, I show that lobbying banks are riskier and reliably underperform their nonlobbying peers. Overall, these results appear rather inconsistent with an information-based explanation of bank lobbying, but consistent with the theory of regulatory capture.