Suchergebnisse

AbstractFinancial crises often seem to be associated with populism, although the populist banking policies introduced to address such crises are far from homogenous. This apparent paradox—a sort of "sight‐unseen consensus"—suggests that specific economic drivers coupled with general psychological components can explain populist consensus. We propose a model of populist consensus, which we term "democratic rioting," in which individuals' decisions to support or resist a specific populist bailout policy after a financial crisis are heavily influenced by psychological group dynamics. Those dynamics, in turn, are driven by general, non‐banking‐related motivations, such as anti‐elite sentiments. In a multiple equilibria setting, the more individuals are unhappy for general economic and/or psychological reasons, the more likely they are to support myopic and redistributive populist banking policies rather than long‐sighted public interventions.

AbstractWe investigate how banks' internal ratings were affected by the first lockdown shock in Italy (March-June 2020). Using monthly proprietary data from a regional bank between October 2019 and January 2022, and adding credit registry data and balance sheet data of client firms, we estimate the lockdown effect on the change in six different ratings assigned by the bank to client firms in June 2020 and December 2020. We obtain three main results. First, controlling for both supply and demand factors, the lockdown is associated with a decline in four of the six ratings. Second, the lockdown effect also depends on specific firm characteristics, i.e. the lockdown effect appears to be mitigated in the presence of high turnover or for firms belonging to essential sectors. However, these interaction effects do not hold for all ratings, suggesting that each type of rating is influenced by different firm characteristics. Third, once we consider a full interaction model, the lockdown effect disappears in the medium term.