On banking regulation and lobbying

Arbeitspapier

We study the political economy of bank capital regulation from a positive and normative perspective. In a general equilibrium setting, capital requirements and lobbying contributions are determined as the outcome of bargaining between banks and politicians. We show that bankers and politicians agree on lobbying contributions and capital regulation that renders banks fragile, reducing efficiency and fairness. Consideration of all general equilibrium effects, or a bail-in provision and high capital regulation standards from international agreements eliminate lobbying incentives, yielding an efficient and fair allocation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Economics Working Paper Series ; No. 19/308

Classification and Topics

• Classification: Wirtschaft ; General Equilibrium and Disequilibrium: Financial Markets ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation
• Subject: Banking regulation ; lobbying ; regulatory capture ; capital requirements ; bank resolution ; risk-taking

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gersbach, Hans ; Papageorgiou, Stylianos
• Event: Veröffentlichung
• (who): ETH Zurich, CER-ETH - Center of Economic Research
• (where): Zurich
• (when): 2019

Further information

• DOI: doi:10.3929/ethz-b-000316298
• Handle: http://hdl.handle.net/10419/194131
• Last update: 10.03.2025, 11:42 AM CET