59 Pages Posted: 23 Aug 2011
Date Written: June 23, 2011
This paper explores the link between the political influence of the financial industry and financial regulation in the run-up to the global financial crisis. We construct a detailed dataset documenting the politically targeted activities of the financial industry from 1999 to 2006.
The analysis shows that lobbying expenditures by the financial industry were directly linked to the position legislators took on the key bills. Network connections of lobbyists and the financial industry with the legislators were also associated with increased odds of the legislator’s position being in favor of lax regulation. These findings support the view that financial regulation is prone to be influenced by the financial industry.
Keywords: lobbying, PAC, financial regulation
JEL Classification: G21, P16
Suggested Citation: Suggested Citation
Igan, Deniz and Mishra, Prachi, Three’s Company: Wall Street, Capitol Hill, and K Street (June 23, 2011). Available at SSRN: https://ssrn.com/abstract=1915164 or http://dx.doi.org/10.2139/ssrn.1915164