Politically Robust Financial Regulation

Financial Regulation

Do Lenders Favor Politically Connected Firms? Rent Provision in an Emerging Financial Market

Corruption by the politically connected is often blamed for economic ills, particularly in less developed economies. Using a loan-level data set of more than 90,000 …rms that represents the universe of corporate lending in Pakistan between 1996 and 2002, we investigate rents to politically connected …rms in banking. Classifying a …rm as “political”if its director participates in an election, we...

Politically Correct Information Adoption

This paper analyses the case when the political struggle not is channeled through policy choices, but through what information to adopt. The paper presents a simple model to analyze collective decisions of adopting new information when different parties' payoffs are contingent upon the new information. In equilibrium we demonstrate that the adopted information is biased towards “political corre...

Financial Market Regulation

"Politically correct" research.

However, a weight-of-evidence approach can only work if there is fill disclosure of industrygenerated unpublished studies. In order to obtain scientific consensus on such matters, we propose that technical reviews of unpublished industry data be carried out by scientists and other technical experts working under the aegis of institutions such as the National Academy of Sciences, the Health Effe...