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The IMF links US bank lobbying to high risk lending

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Posted by apesphere on 05 Jan 2010

Image courtesy dbaron via Flickr

The International Monetary Fund is not known for random assaults on the financial establishment.

This makes the results of a new IMF study - A Fistfull of Dollars: Lobbying and the Financial Crisis - all the more compelling. Large US banks that spend heavily on lobbying are more likely to engage in high-risk lending, and their shares perform less well. The UK's Guardian newspaper notes that finance sector lobbying outstripped all other sectors.

It is 8 days until the Financial Crisis Inquiry Commission begin to take testimony from top bankers. Their lobbying activities should provide one of the core, and still current, seams of questioning.

Andrew Newton is the author of The Handbook of Compliance: Making Ethics Work in Financial Services