دانلود رایگان مقاله ناپایداری بانکداری منطقه ای و رای FOMC

bstract

 This study analyzes if regionally affiliated Federal Open Market Committee (FOMC) members take their districts’ regional banking sector instability into account when they vote. Considering the period 1979– 2010, we find that a deterioration in a district’s bank health increases the probability that this district’s representative in the FOMC votes to ease interest rates. According to member-specific characteristics, the effect of regional banking sector instability on FOMC voting behavior is most pronounced for Bank presidents (as opposed to Governors) and FOMC members who have career backgrounds in the financial industry or who represent a district with a large banking sector.

4. Conclusions

We investigate whether FOMC members align their voting behavior in the FOMC with the degree of banking sector instability in their districts. Our robust results show that FOMC members vote for lower interest rates when confronted with higher levels of banking instability in their district. We explore different channels for the impact of regional banking sector instability on the voting behavior of FOMC members. Bank presidents react more sensitively to bank instability in their district than Governors. Longer committee experience increases the impact of bank instability on the voting behavior. Moreover, regional banking sector instability affects voting behavior only for Democratic affiliates, while no significant effect is found for Republican affiliates.