Abstract

http://ssrn.com/abstract=2348968
 
 

References (22)



 


 



The Revolving Door for Financial Regulators


Sophie Shive


University of Notre Dame - Department of Finance

Margaret Forster


University of Notre Dame

August 4, 2015


Abstract:     
We test whether quid pro quo and/or regulatory expertise drives financial firms' hiring of former U.S. financial regulatory employees from 2001-2014. The number of Boardex-listed ex-regulators per firm has increased 33% during 2001-2014, and hiring is associated with positive average announcement returns and a salary premium. In the quarter after hire, market and balance sheet measures of firm risk decrease significantly. Tests using unregulated firms and exogenous shocks to regulatory experience suggest that firms hire ex-employees of their regulators when they need to reduce risk. We find little evidence of quid-pro-quo in regulatory event frequency or fines.

Number of Pages in PDF File: 57

Keywords: revolving door, regulation


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Date posted: November 9, 2013 ; Last revised: August 5, 2015

Suggested Citation

Shive, Sophie and Forster, Margaret, The Revolving Door for Financial Regulators (August 4, 2015). Available at SSRN: http://ssrn.com/abstract=2348968 or http://dx.doi.org/10.2139/ssrn.2348968

Contact Information

Sophie Shive (Contact Author)
University of Notre Dame - Department of Finance ( email )
P.O. Box 399
Notre Dame, IN 46556-0399
United States
Margaret Forster
University of Notre Dame ( email )
Notre Dame, IN 46556-5646
United States
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References:  22

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