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Political connections and depositor discipline

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  • M. DISLI
  • K. SCHOORS
  • J. MEIR

Abstract

We analyze how political connections affect 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, but 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 depart with them.

Suggested Citation

  • M. Disli & K. Schoors & J. Meir, 2012. "Political connections and depositor discipline," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 12/781, Ghent University, Faculty of Economics and Business Administration.
    • Handle: RePEc:rug:rugwps:12/781
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    More about this item

    Keywords

    Depositor Discipline; Political connections; Banks;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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