Media Capture by Banks

62 Pages Posted: 22 Sep 2020

See all articles by Ruben Durante

Ruben Durante

Catalan Institution of Research and Advanced Studies (ICREA); Universitat Pompeu Fabra, Department of Economics and Business, Students

Andrea Fabiani

Bank of Italy

José-Luis Peydró

Imperial College London; Centre for Economic Policy Research (CEPR); Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Date Written: September 2020

Abstract

Do banks exploit lending relationships with media companies to promote favorable news coverage? To test this hypothesis we map the connections between banks and the top newspapers in several European countries and study how they affect news coverage of two important financial issues. First we look at bank earnings announcements and find that newspapers are significantly more likely to cover announcements by their lenders, relative to other banks, when they report profits than when they report losses. Such pro-lender bias applies to both general-interest and financial newspapers, and is stronger for newspapers and banks that are more financially vulnerable. Second, we look at a broader public interest issue: the Eurozone Sovereign Debt Crisis. We find that newspapers connected to banks more exposed to stressed sovereign bonds are more likely to promote a narrative of the crisis favorable to banks and to oppose debt-restructuring measures detrimental to creditors.

Keywords: banks, Earnings reports, Eurobond crisis, media bias, newspapers

JEL Classification: G21, L82

Suggested Citation

Durante, Ruben and Fabiani, Andrea and Peydro, Jose-Luis, Media Capture by Banks (September 2020). Available at SSRN: https://ssrn.com/abstract=3696339

Ruben Durante (Contact Author)

Catalan Institution of Research and Advanced Studies (ICREA) ( email )

P/ Lluis Companys 23
Barcelona, 08010
Spain

Universitat Pompeu Fabra, Department of Economics and Business, Students ( email )

Barcelona
Spain

HOME PAGE: http://www.rubendurante.net

Andrea Fabiani

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Jose-Luis Peydro

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, Barcelona 08005
Spain
(+34) 93 542 1756 (Phone)
(+34) 93 542 1746 (Fax)

HOME PAGE: http://https://sites.google.com/site/joseluispeydroswebpage/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
493
PlumX Metrics