Political influence on bank credit allocation is often viewed as being necessary to address social problems like income … inequality. We hypothesize that such influence affects bank governance and elicits bank capital responses. Our hypothesis yields … implications for the interaction between politics, household consumption and bank governance and risk through a specific channel …

I develop a theory of political influence on bank lending and capital structure. The idea is that legislators may want … to direct bank credit to politically-favored loans that reduce bank shareholder wealth, but generate social and … in misestimating the bank's valuation of its lending alternatives can generate “hidden” banking fragility. Third, when …

I develop a theory of political influence on bank lending and capital structure. The idea is that legislators may want … to direct bank credit to politically-favored loans that reduce bank shareholder wealth, but generate social and … in misestimating the bank's valuation of its lending alternatives can generate “hidden” banking fragility. Third, when …