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Political connections and depositor discipline

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  • Disli, Mustafa
  • Schoors, Koen
  • Meir, Jos

Abstract

We examine the effects of political connections on depositor discipline in a sample of Turkish banks. Banks with former members of parliament at the helm enjoy reduced depositor discipline, especially if the former politician's party is currently in power – less so if the former politician served as a minister. Banks with structural problems are more likely to appoint former politicians, but our results remain robust after controlling for selection effects. Ministers may reduce depositor discipline less because they signal severe problems and because the additional government deposits they bring to the bank during their term tend to leave with them.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Financial Stability.

Volume (Year): 9 (2013)
Issue (Month): 4 ()
Pages: 804-819

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Handle: RePEc:eee:finsta:v:9:y:2013:i:4:p:804-819

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Web page: http://www.elsevier.com/locate/jfstabil

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Keywords: Depositor discipline; Political connections; Banks;

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References

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Cited by:
  1. M. Disli & K. Schoors, 2013. "Bank rebranding and depositor loyalty," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 13/867, Ghent University, Faculty of Economics and Business Administration.
  2. Disli, Mustafa & Schoors , Koen & Meir, Jos, 2013. "Political connections and depositor discipline," BOFIT Discussion Papers 6/2013, Bank of Finland, Institute for Economies in Transition.
  3. A. F. Aysan & M. Disli & H. Ozturk & I. M. Turhan, 2013. "Are Islamic Banks Subject to Depositor Discipline?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 13/871, Ghent University, Faculty of Economics and Business Administration.

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