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Fear, Anger, And Credit. On Bank Robberies And Loan Conditions

Author

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  • Paola Morales‐Acevedo
  • Steven Ongena

Abstract

We study the impact of emotions on real‐world decisions made by loan officers by analyzing the loan conditions of loans granted immediately after a bank branch robbery. We find significant differences between the conditions of loans granted after a robbery and changes in loan conditions that occur contemporaneously at unaffected branches. In general, loan officers seem to adopt so‐called avoidance behavior. In accordance with the literature on posttraumatic stress, their avoidance behavior is halved within 2 weeks following the robbery and the effect further varies depending on the presence, or absence, of a firearm during the robbery. (JEL G02, G2)

Suggested Citation

  • Paola Morales‐Acevedo & Steven Ongena, 2020. "Fear, Anger, And Credit. On Bank Robberies And Loan Conditions," Economic Inquiry, Western Economic Association International, vol. 58(2), pages 921-952, April.
    • Handle: RePEc:bla:ecinqu:v:58:y:2020:i:2:p:921-952
    DOI: 10.1111/ecin.12826
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    Cited by:

    1. Lucas A. Mariani & Jose Renato Haas Ornelas & Bernardo Ricca, 2023. "Banks’ Physical Footprint and Financial Technology Adoption," Working Papers Series 576, Central Bank of Brazil, Research Department.
    2. Bertrand, Jérémie & Burietz, Aurore, 2023. "(Loan) price and (loan officer) prejudice," Journal of Economic Behavior & Organization, Elsevier, vol. 210(C), pages 26-42.
    3. Bhattacharya, Debarati & Cheng, Tzu-Chang Forrest & Chuang, Meng-Ju & Li, Wei-Hsien & Wang, Zi-Peng, 2024. "Terrorism-Induced Trauma and Corporate Innovation," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    4. Mariani, Lucas A. & Haas Ornelas, José Renato & Ricca, Bernardo, 2023. "Banks’ Physical Footprint and Financial Technology Adoption," IDB Publications (Working Papers) 12812, Inter-American Development Bank.
    5. Udichibarna Bose & Stefano Filomeni & Elena Tabacco, 2025. "Does Soft Information Mitigate Gender Bias in Corporate Lending?," Journal of Business Ethics, Springer, vol. 198(2), pages 437-466, May.

    More about this item

    JEL classification:

    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G2 - Financial Economics - - Financial Institutions and Services

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