Banks and Lobbyists

Available for over a year

America's top bankers are in the limelight again. Not only are Wall Street's most powerful facing the scrutiny of a Commission of Inquiry into how the financial crisis started, they are also expected to announce huge bonuses, the financial rules are being re-written by Congress, and the Obama administration is considering imposing a levy on them to pay for their giant bailout. But how did they secure that rescue? Research has been published which raises the question: have banks used political lobbying as insurance to secure bailouts if and when their risky loans blew up in their faces? A team at the International Monetary Fund found evidence that banks which spent lavishly on lobbying were also more likely to engage in high-risk lending. Lesley Curwen talks to economist Deniz Igan from the IMF team behind the research. She suggests there could be several explanations for the findings. Plus, US lobbyist Michael Lewan of the Brown Rudnick law firm defends the role of the lobbyist. And our commentator Magnus Lindkvist talks about a J-shaped recession.