Media Capture by Banks

57 Pages Posted: 27 Dec 2021 Last revised: 4 Apr 2022

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

Luc Laeven

European Central Bank (ECB); Centre for Economic Policy Research (CEPR)

José-Luis Peydró

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

Multiple version iconThere are 2 versions of this paper

Date Written: December 27, 2021

Abstract

Do media slant news in favor of the banks they borrow from? We study how lending connections affect news coverage of banks’ earnings reports and of the Eurozone sovereign debt crisis on major newspapers from several European countries. We find that newspapers cover announcements by their lenders - relative to those of other banks - significantly more when they report profits than when they report losses. Such pro-lender bias is stronger for more leveraged outlets and banks, and operates on the extensive margin for general-interest newspapers and on the intensive margin for financial newspapers. Regarding the Eurozone 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: Media bias, Banks, Newspapers, Earnings reports, Eurozone crisis

JEL Classification: G21, L82

Suggested Citation

Durante, Ruben and Fabiani, Andrea and Laeven, Luc A. and Peydro, Jose-Luis, Media Capture by Banks (December 27, 2021). Available at SSRN: https://ssrn.com/abstract=3994484 or http://dx.doi.org/10.2139/ssrn.3994484

Ruben Durante

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 (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Luc A. Laeven

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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/

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