The Partisanship of Financial Regulators

Abstract

We analyze the partisanship of Securities and Exchange Commissioners (SEC) and members of the Federal Reserve Board of Governors (Fed) using the language-based approach of Gentzkow, Shapiro, and Taddy (Econometrica, 2019). The level of partisanship among these regulators is greater than that of Congress, but this is driven by a handful of speakers who repeat polarizing phrases across several speeches. When we quantify how much Republican (Democrat) regulators sound like Republicans (Democrats) in Congress we find no discernible pattern among Fed governors but a recent spike among SEC commissioners.

Keywords: Partisanship, Federal Reserve, Security and Exchange Commission, Textual Analysis

JEL Classification: G18, G28, G38