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---

### I. INTRODUCTION
- Lobbyists in Washington mainly represent business interests and provide policy research, sponsor think tanks, mobilize grassroots constituencies, build relationships with decision-makers, draft and amend bills, and assist agencies in writing complex rules.
- Policy complexity increases the value of lobbyists’ activities because it creates room to insert narrow provisions and gives lobbyists an informational advantage for legislators and regulators.
- Banks are heavily regulated and supervised; dysfunction in the banking system can pose significant risks to the economy through financial crises and macro-financial linkages.
- Research focus:
  - Effects of regulation and supervision on bank decisions and performance.
  - Influence of the banking industry on regulation, including concepts of “regulatory capture” (Stigler (1971)) and “legislative capture.”
- Paper structure (as presented):
  - Section II: overview and empirical characteristics of bank lobbying in the United States.
  - Section III: motivations behind bank lobbying and a conceptual framework of regulatory capture.
  - Section IV: review of empirical evidence on the impact of lobbying on regulation, supervision, and crisis-era outcomes.
  - Section V: policy implications.

### II. BANK LOBBYING IN THE UNITED STATES
- Legal and disclosure context:
  - Lobbying Disclosure Act of 1995 (LDA) requires disclosure of dollar amounts received from clients and issue areas targeted.
- Scale and sectoral figures (1998–2016):
  - The whole financial sector (finance, insurance, and real estate) spent $7.4 billion on lobbying in the period that ran from 1998 to 2016.
  - Financial sector PAC contributions between 1998 and 2016 amounted to $675 million; total (including individual contributions and soft money) was $4.6 billion.
  - Within the financial sector, banks (commercial banks, credit unions, savings and loans, mortgage bankers and brokers) spent a total of $1.2 billion over 1998–2016.
- Time-series behavior:
  - Banks’ lobbying expenditures rose from a trough of $36.3 million in 1999 to a peak of $88.2 million in 2014.
  - Banks’ lobbying expenditures declined during 2015–16 to an annual average of $86.3 million.
- Relative scale puzzle and explanations:
  - Example: Citigroup Inc. spent $5.47 million in lobbying in 2016 while reporting $17 billion in revenues for the fourth quarter 2016 only.
  - Explanations:
    - Banking interests are aligned and well-organized vs. diffuse public opposition.
    - Informational content: key piece of information often suffices; marginal information has low value.
    - Lobbying supplemented by other influence mechanisms: access, career concerns, revolving doors.
    - Concentration: a small number of large banks actively lobby; high fixed costs and returns to experience induce persistence.
- Data availability and limitations:
  - LDA disclosures improved data availability; filings are rounded to the nearest $20,000; filings under $10,000 in a six-month period may be treated as zero by CRP.
  - Hidden/undeclared lobbying likely substantial; hidden lobbying could be as large as registered lobbying.

### III. BANK LOBBYING AND REGULATORY CAPTURE: A CONCEPTUAL FRAMEWORK
- Players and roles:
  - Legislature: designs rules to serve the public interest.
  - Regulator: implements and enforces rules to support public interest.
  - Banks: provide information to legislature and regulator; may lobby to influence rule design and enforcement.
- Framework panels:
  - Panel A (first-best): information flows from banks to legislators/regulators serve public interest (informational role).
  - Panel B (capture): collusion between regulator/legislator and banks maximizes private returns at public expense (regulatory/legislative capture).
- Two main economic channels for capture:
  - Career concerns: lower public-sector salaries and prospect of private-sector jobs create incentives to be industry-friendly; “revolving doors” can reward industry-friendly behavior; complexity increases demand for industry expertise and value of ex-regulators.
  - Information asymmetries: regulators need industry-provided information; preferential treatment can be traded for information or private benefits (bailout guarantees, privileged licenses, lax supervision).
- Lobbying operation:
  - Predominantly operates through informational/preferential-treatment channel; interest-group theories (Stigler, Peltzman, Becker) underpin this view.
  - Asymmetric access and free-rider problems: industry has superior access to information and influence; public faces coordination problems that reduce countervailing pressure.
- Empirical studies broadly support regulatory capture perspective; political connections affect regulatory frameworks and firm outcomes.

### IV. BANK LOBBYING AND REGULATORY CAPTURE: RECENT EVIDENCE

A. Banking Regulation
- Legislative process and identification:
  - Sponsorship/co-sponsorship data used to infer stances when recorded votes are unavailable; lobbyists target key committees and offices.
- Key empirical findings (Igan and Mishra (2014), 1999–2006):
  - Dataset: firm-level lobbying expenditures targeted at specific bills; campaign contributions; employment histories; 47 financial regulation bills grouped into “tight” or “lax” categories.
  - Major results:
    - No “tight” bill passed both chambers and became law; 16 percent of “lax” bills did.
    - A one-standard-deviation increase in lobbying expenditures is associated with a 3.7 percentage point increase in the probability of a legislator switching position in favor of deregulation.
    - Lobbying by individuals who previously worked for a legislator is associated with a 2.5 percentage point increase in the probability of switching.
    - Lobbying has a stronger link to moving support toward deregulation if the legislator has previously worked in the financial sector and if she has more conservative tendencies.
  - Interpretation: evidence leans toward rent-seeking/regulatory capture rather than purely informational explanations.

B. Banking Supervision
- Enforcement actions context:
  - Severe enforcement actions include formal written agreements, cease and desist orders, prompt corrective action, or deposit insurance threat; supervisors have broad discretion.
- Key empirical findings (Lambert (2018)):
  - Sample: virtually all commercial and savings banks during the enforcement-intense period around the global financial crisis.
  - Major results:
    - Lobbying status reduces the probability of being targeted by a severe enforcement action by 44.7 percent.
    - One additional year of lobbying experience decreases this probability by 11.4 percent.
    - Results robust to controlling for CAMELS rating and endogeneity.
    - Weaker effects on the intensive margin of lobbying spending once participating in lobbying.
    - Lobbying banks exhibit higher aggregate risk (Z-score), expand more aggressively on- and off-balance-sheet in the pre-crisis years, and experience increased nonperforming loans afterwards.
    - Lobbying banks have lower performance than other banks; underperformance persists in the long run and when regulators face greater uncertainty.
  - Interpretation: findings consistent with regulatory capture (preferential supervisory treatment enabling risk-taking), less consistent with pure informational lobbying.

C. Financial Outcomes: The Case of the Global Financial Crisis
- Mechanism and anecdote:
  - Lax regulation and avoidance of enforcement potentially allowed lobbying banks to engage in riskier lending (2000–2007), culminating in worse outcomes and preferential bailout treatment in 2008.
- Key empirical findings (Igan, Mishra, and Tressel (2012); Igan et al. (2017)):
  - Ex-ante (2000–2007) and ex-post (2008) results:
    - Lobbying banks originated mortgages with higher loan-to-income ratios.
    - Lobbying banks securitized a faster growing proportion of originated loans.
    - Lobbying banks had faster growing mortgage loan portfolios.
    - Faster relative mortgage growth by lobbying lenders associated with higher delinquency rates in 2008.
    - Event study: lobbying lenders experienced negative abnormal stock returns at the failures of Bear Stearns and Lehman Brothers, but positive abnormal returns around the announcement of the bailout program (TARP).
    - Lobbying lenders were more likely to be recipients of bailout funds.
  - Failed-bank resolution and FDIC auctions (2007–2014):
    - Bidders lobbying banking regulators have a 26.4 percentage point higher probability of winning an auction.
    - A one-standard-deviation increase in lobbying expenditures targeted on banking regulators increases the probability of winning by 6.6 percentage points.
    - Revolving-door lobbyists and direct lobbying contact with FDIC have the largest effects on auction outcomes.
    - Lobbying acquirers pay relatively less; lobbying is associated with a cost due to suboptimal bidder choice equal to 16.4 percent of total resolution losses, amounting to a transfer of $7.4 billion from the Deposit Insurance Fund (DIF) to lobbying bidders.
    - Lobbying acquirers deliver inferior post-acquisition efficiency outcomes.
  - Interpretation: evidence supports rent-seeking that undermines efficiency of resolution and imposes real costs on deposit insurance funds.

### V. LESSONS AND POLICY IMPLICATIONS
- Summary assessment:
  - Systematic evidence indicates bank-level lobbying is associated with reduced support for tighter rules and enforcement, more risk-taking, worse outcomes in crises, and preferential bailout/allocation outcomes—consistent with a regulatory capture view.
- Policy dilemma:
  - If lobbying primarily provides valuable information, curtailing it could be socially harmful; if lobbying primarily pursues private rents (capture), curtailment is warranted.
- Two suggested policy avenues to contain regulatory capture:
  1. Enhance transparency of regulatory decisions via mandated ex-post disclosure:
     - Disclose deliberations, minutes of meetings, names of regulatory staff involved, data and models used, number and nature of contacts with registered lobbyists (including names and positions advocated), and assessments of how lobbyist inputs were factored into final decisions.
     - Disclosures could be delayed and hosted on regulators’ web portals.
     - Increased disclosure would boost regulators’ accountability and increase reputational costs of collusion; the media plays a key watchdog role.
  2. Implement checks and balances within regulatory decision-making:
     - Properly structure and resource agencies; internal cultural and liability changes in the industry.
     - Ensure inclusion of dissenting views from legitimate groups with different interests (customers, smaller financial institutions, trade unions).
     - Adopt tripartite-like mechanisms (Ayres and Braithwaite (1991) spirit): give these groups lobbying powers, a seat at negotiation tables, full access to relevant information, and standing to take legal action when warranted.
- Research needs:
  - More work needed to understand drivers and incidence of capture and its industry- and society-level consequences.
  - Post-crisis consolidation and Dodd-Frank implementation provide opportunities to study lobbying adaptations (e.g., bypassing Congress).
- Closing note:
  - Aim to contain capture so benefits of regulation exceed costs of capture rather than advocating outright bans.

### Appendix: Reporting and Recording of Lobbying Data
- LDA registration and reporting rules:
  - Registration within 45 days after an individual first makes or is employed/retained to make a lobbying contact with high-level federal officials.
  - Since 1996, semi-annual reports filed with the Secretary of the Senate’s Office of Public Records (SOPR) listing client names and total income received.
  - Firms with in-house lobbying must file similar reports stating total dollars spent.
  - LDA requires filers to state general issue areas (76 general issue areas) and list specific issues lobbied during the reporting period (including specific bills or executive branch actions).
- Data sources and CRP processing:
  - Datasets summarized in studies are based on semi-annual lobbying disclosure reports from SOPR and the Center for Responsive Politics (CRP).
  - For specific issues and offices contacted, individual PDF reports on SOPR are used.
  - Lobbying firms provide a good-faith estimate rounded to the nearest $20,000 per six-month period.
  - Organizations spending less than $10,000 in a six-month period may not have to state expenditures; CRP treats such cases as zero.
  - CRP calculates annual lobbying expenditures by adding mid-year and year-end totals; amendments generally replace original figures unless judged inaccurate.
  - CRP standardizes names, attributes subsidiary lobbying spending to parent organizations for parent totals, but counts subsidiaries in their own sector/industry for sectoral totals when information allows.
  - Association lobbying expenditures (e.g., American Bankers Association, Securities Industry and Financial Markets Association) are included in sector and industry totals.

### Figures and key statistics (extracted captions and figure notes)
- Lobbying Spending by Financial Industries (percent of total spending by the financial industry in 1998-2016) — shares:
  - Banks: 16%
  - Accountants: 3%
  - Finance companies: 7%
  - Insurance: 32%
  - Miscellaneous: 5%
  - Real Estate: 18%
  - Securities & investment: 19%
  - Note: "Miscellaneous mainly include companies providing financial data, consulting, and support services (e.g., Bloomberg LP, Experian)."
- Lobbying by Banks and Other Financial Industries (in percent of industry value added) — y-axis tick labels:
  - 0.008%
  - 0.010%
  - 0.012%
  - 0.014%
  - 0.016%
  - 0.018%
  - 0.020%
  - Time span on figure: 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
  - Series shown: "Banks" and "FIRE excl. banks"
- Timeline of major U.S. policy acts annotated:
  - Financial Services Modernization Act of 1999 (repeal of Glass-Steagall)
  - Commodity Futures Modernization Act of 2000 (exemption of derivatives, including credit default swaps)
  - American Homeownership and Economic Opportunity Act of 2000
  - American Dream Downpayment Act of 2003 (increase in federal housing support programs)
  - Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (strengthening creditor rights)
  - Emergency Economic Stabilization Act of 2008 (authorization of TARP)
  - Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank")

*Source: wpiea2019171-print-pdf - References .............................................................................................................*

### References .............................................................................................................

### References ............................................................................................................................... 25

### I. INTRODUCTION
- Lobbyists in Washington mainly represent business interests and provide policy research, sponsor think tanks, mobilize grassroots constituencies, build relationships with decision-makers, draft and amend bills, and assist agencies in writing complex rules.
- Policy complexity increases the value of lobbyists’ activities because it creates room to insert narrow provisions and gives lobbyists an informational advantage for legislators and regulators.
- Banks are heavily regulated and supervised; dysfunction in the banking system can pose significant risks to the economy through financial crises and macro-financial linkages.
- Research focus:
  - Effects of regulation and supervision on bank decisions and performance (extensive literature cited).
  - Influence of the banking industry on regulation (scarcer but growing literature; concept of “regulatory capture” introduced by Stigler (1971) and expanded to include “legislative capture”).
- Paper structure:
  - Section II: overview and empirical characteristics of bank lobbying in the United States.
  - Section III: motivations behind bank lobbying and a conceptual framework of regulatory capture.
  - Section IV: review of empirical evidence on the impact of lobbying on regulation, supervision, and crisis-era outcomes.
  - Section V: policy implications.

### II. BANK LOBBYING IN THE UNITED STATES
- Legal context:
  - Lobbying activities in executive and legislative branches are legally permitted; Lobbying Disclosure Act of 1995 (LDA) requires disclosure of dollar amounts received from clients and issue areas targeted.
- Scale and sectoral figures (1998–2016):
  - The whole financial sector (finance, insurance, and real estate) spent $7.4 billion on lobbying in the period that ran from 1998 to 2016.
  - Financial sector PAC contributions between 1998 and 2016 amounted to $675 million; total (including individual contributions and soft money) was $4.6 billion.
  - Within the financial sector, leading industries in lobby spending: insurance, securities and investment, real estate; banks (commercial banks, credit unions, savings and loans, mortgage bankers and brokers) spent a total of $1.2 billion over 1998–2016.
- Time series behavior:
  - Banks’ lobbying expenditures rose from a trough of $36.3 million in 1999 to a peak of $88.2 million in 2014.
  - Banks’ lobbying expenditures declined during 2015–16 to an annual average of $86.3 million.
- Relative scale puzzle:
  - Example: Citigroup Inc. spent $5.47 million in lobbying in 2016 while reporting $17 billion in revenues for the fourth quarter 2016 only.
  - Explanations for relatively modest spending:
    - Banking interests are aligned and well-organized vs. diffuse public opposition.
    - Informational content: key piece of information often suffices; marginal information has low value.
    - Lobbying supplemented by other influence mechanisms: access, career concerns, revolving doors.
  - Concentration: only a small number of large banks actively lobby; high fixed costs and returns to experience act as barriers to entry, inducing persistence.
- Data availability and limitations:
  - LDA disclosures improved data availability; lobbying expenditures can be linked to specific issue areas and targeted bills.
  - Reporting thresholds and rounding: estimates are rounded to the nearest $20,000; filings under $10,000 in a six-month period may be treated as zero by CRP.
  - Hidden/undeclared lobbying likely substantial; estimates suggest hidden lobbying could be as large as registered lobbying.

### III. BANK LOBBYING AND REGULATORY CAPTURE: A CONCEPTUAL FRAMEWORK
- Players and interactions (adapted from Mitnick (1980) and Dockner (2014)):
  - Legislature: designs rules to serve the public interest.
  - Regulator: implements and enforces rules to support public interest.
  - Banks: provide information to legislature and regulator; may lobby to influence rule design and enforcement.
- Panels in framework:
  - Panel A (first-best): information flows from banks to legislators/regulators serve public interest (informational role).
  - Panel B (capture): collusion between regulator/legislator and banks maximizes private returns at public expense (regulatory/legislative capture).
- Two main economic channels for capture:
  - Career concerns: regulators seek to maximize lifetime earnings; lower public-sector salaries and prospect of private-sector jobs create incentives to be industry-friendly; “revolving doors” can reward industry-friendly behavior; complexity of rules increases demand for industry expertise and value of ex-regulators.
  - Information asymmetries: regulators need industry-provided information; preferential treatment can be traded for information (or private benefits such as bailout guarantees, privileged licenses, or lax supervision).
- Lobbying predominantly operates through the informational/preferential-treatment channel (Panel B arrows from banks to legislator and regulator); interest-group theories (Stigler, Peltzman, Becker) underpin much of this view.
- Asymmetric access and free-rider problems: industry has superior access to information and influence; public faces coordination problems that reduce countervailing pressure.
- Empirical studies broadly support the regulatory capture perspective; political connections affect regulatory frameworks and firm outcomes.

### IV. BANK LOBBYING AND REGULATORY CAPTURE: RECENT EVIDENCE

A. Banking Regulation
- Legislative process overview and identification strategy:
  - Bills progress from sponsor/co-sponsors through committees; sponsorship and co-sponsorship data can indicate legislators’ stances when recorded votes are unavailable.
  - Lobbyists target key committees and administrative offices; lobby filings sometimes state client objectives.
- Key empirical study: Igan and Mishra (2014), financial regulation bills 1999–2006
  - Dataset: firm-level lobbying expenditures targeted at specific bills; campaign contributions; employment histories to map network connections; 47 financial regulation bills grouped into “tight” or “lax” categories.
  - Main findings:
    - No “tight” bill passed both chambers and became law; 16 percent of “lax” bills did.
    - The majority of lax-regulation proposals were ultimately signed into law; none of the tight-regulation proposals succeeded.
    - A one-standard-deviation increase in lobbying expenditures is associated with a 3.7 percentage point increase in the probability of a legislator switching position in favor of deregulation.
    - Lobbying by individuals who previously worked for a legislator is associated with a 2.5 percentage point increase in the probability of switching.
    - Lobbying has a stronger link to moving support toward deregulation if the legislator has previously worked in the financial sector and if she has more conservative tendencies.
  - Interpretations:
    - Informational/expertise channel vs. compromise dynamics vs. rent-seeking to buy off legislators; evidence (e.g., lack of systematic increase in switching over successive incarnations and stronger effects with legislators’ financial-sector experience) leans toward rent-seeking/regulatory capture interpretation.

B. Banking Supervision
- Enforcement actions context:
  - Severe enforcement actions include formal written agreements, cease and desist orders, prompt corrective action, or deposit insurance threat; these actions impose direct costs on banks and management.
  - Supervisors have broad discretion in assessing problems and imposing enforcement.
- Key empirical study: Lambert (2018)
  - Sample: virtually all commercial and savings banks during the enforcement-intense period around the global financial crisis.
  - Main findings:
    - Lobbying status reduces the probability of being targeted by a severe enforcement action by 44.7 percent.
    - One additional year of lobbying experience decreases this probability by 11.4 percent.
    - Results robust to controlling for CAMELS rating and endogeneity.
    - Weaker effects on the intensive margin of lobbying spending once participating in lobbying.
    - Lobbying banks exhibit higher aggregate risk (Z-score), expand more aggressively on- and off-balance-sheet in the pre-crisis years, and experience increased nonperforming loans afterwards.
    - Lobbying banks have lower performance than other banks; underperformance persists in the long run and when regulators face greater uncertainty.
  - Interpretation: findings consistent with regulatory capture (preferential supervisory treatment enabling risk-taking), less consistent with pure informational lobbying.

C. Financial Outcomes: The Case of the Global Financial Crisis
- Mechanism and anecdotal evidence:
  - Lax regulation and avoidance of enforcement potentially allowed lobbying banks to engage in riskier lending (2000–2007), culminating in worse outcomes and potential preferential bailout treatment in 2008.
  - Contemporary press accounts cited lobby-driven regulatory relaxation and political intercession in bailout allocations.
- Empirical study: Igan, Mishra, and Tressel (2012)
  - Dataset: banks’ lobbying and mortgage lending activities; focus on 2000–2007 lending and 2008 outcomes.
  - Ex-ante risk measures and findings:
    - Lobbying banks originated mortgages with higher loan-to-income ratios.
    - Lobbying banks securitized a faster growing proportion of originated loans.
    - Lobbying banks had faster growing mortgage loan portfolios.
  - Ex-post performance and bailout evidence:
    - Faster relative mortgage growth by lobbying lenders associated with higher delinquency rates in 2008.
    - Event study: lobbying lenders experienced negative abnormal stock returns at the failures of Bear Stearns and Lehman Brothers, but positive abnormal returns around the announcement of the bailout program (TARP).
    - Lobbying lenders were more likely to be recipients of bailout funds.
  - Interpretation:
    - Possible explanations include specialization in riskier borrowers, over-optimism (informational view), or rent-seeking to obtain preferential treatment and bailout (regulatory capture). Larger lenders lobbied more and had higher bailout probability—consistent with too-big-to-fail rent-seeking.
- Failed-bank resolution and FDIC auctions: Igan et al. (2017)
  - Dataset: failed-bank auctions conducted by the FDIC during 2007–2014.
  - Main findings:
    - Bidders lobbying banking regulators have a 26.4 percentage point higher probability of winning an auction.
    - A one-standard-deviation increase in lobbying expenditures targeted on banking regulators increases the probability of winning by 6.6 percentage points.
    - Revolving-door lobbyists and direct lobbying contact with FDIC have largest effects on auction outcomes.
    - Lobbying acquirers pay relatively less; lobbying is associated with a cost due to suboptimal bidder choice equal to 16.4 percent of total resolution losses, amounting to a transfer of $7.4 billion from the Deposit Insurance Fund (DIF) to lobbying bidders.
    - Lobbying acquirers deliver inferior post-acquisition efficiency outcomes.
  - Interpretation: evidence supports rent-seeking that undermines efficiency of resolution and imposes real costs on deposit insurance funds.

### V. LESSONS AND POLICY IMPLICATIONS
- Summary conclusion:
  - Systematic evidence indicates bank-level lobbying is associated with reduced support for tighter rules and enforcement, more risk-taking, worse outcomes in crises, and preferential bailout/allocation outcomes—consistent with a regulatory capture view.
- Policy dilemma:
  - If lobbying primarily provides valuable information, curtailing it could be socially harmful; if lobbying primarily pursues private rents (capture), curtailment is warranted.
- Two suggested policy avenues to contain regulatory capture (while acknowledging this is not exhaustive):
  1. Enhance transparency of regulatory decisions via mandated ex-post disclosure:
     - Disclose deliberations, minutes of meetings, names of regulatory staff involved, data and models used, number and nature of contacts with registered lobbyists (including names and positions advocated), and assessments of how lobbyist inputs were factored into final decisions.
     - Disclosures could be delayed and hosted on regulators’ web portals.
     - Increased disclosure would boost regulators’ accountability to public and competing parties and increase reputational costs of collusion.
     - The media plays a key watchdog role to overcome private information costs.
  2. Implement checks and balances within regulatory decision-making:
     - Properly structure and resource agencies; internal cultural and liability changes in the industry.
     - Ensure inclusion of dissenting views from legitimate groups with different interests (customers, smaller financial institutions, trade unions).
     - Adopt tripartite-like mechanisms (Ayres and Braithwaite (1991) spirit): give these groups lobbying powers, a seat at negotiation tables, full access to relevant information, and standing to take legal action when warranted.
- Research needs:
  - More work is needed to better understand drivers and incidence of capture and its industry- and society-level consequences.
  - Post-crisis consolidation and Dodd-Frank implementation provide opportunities to study lobbying adaptations (e.g., bypassing Congress).
- Closing note:
  - Findings point to rethinking frameworks governing interactions between regulators and the industry; aim to contain capture so benefits of regulation exceed costs of capture rather than advocating outright bans.

### Appendix: Reporting and Recording of Lobbying Data
- LDA registration requirements:
  - Registration within 45 days after an individual first makes or is employed/retained to make a lobbying contact with high-level federal officials.
  - Since 1996, semi-annual reports filed with the Secretary of the Senate’s Office of Public Records (SOPR) listing client names and total income received.
  - Firms with in-house lobbying must file similar reports stating total dollars spent.
- Issue-area disclosure:
  - LDA requires filers to state general issue areas (76 general issue areas) and list specific issues lobbied during the reporting period (including specific bills or executive branch actions).
- Data sources and compilation:
  - Datasets in summarized studies based on semi-annual lobbying disclosure reports from SOPR and the Center for Responsive Politics (CRP) website.
  - For detailed specific issues and offices contacted, individual PDF reports on SOPR are used.
- Reporting rules and rounding:
  - Lobbying firms provide a good-faith estimate rounded to the nearest $20,000 per six-month period.
  - Organizations spending less than $10,000 in a six-month period may not have to state expenditures; CRP treats such cases as zero.
  - Discrepancies between lobbying firm income and client-reported expenditures are reconciled using client expenditures or lobbying firm receipts depending on circumstances.
- CRP data processing:
  - Annual lobbying expenditures calculated by adding mid-year and year-end totals; amendments generally replace original figures unless judged inaccurate.
  - CRP standardizes names, attributes subsidiary lobbying spending to parent organizations for parent totals, but counts subsidiaries in their own sector/industry for sectoral totals when information allows.
  - Association lobbying expenditures (e.g., American Bankers Association, Securities Industry and Financial Markets Association) are included in sector and industry totals.

*Source: wpiea2019171-print-pdf - References .............................................................................................................*

### References

### References

### Major themes covered in the referenced literature
- Regulatory capture and its theory and mitigation (e.g., dal Bó, 2006; Carpenter and Moss, 2013; Mitnick, 1980; Laffont and Tirole, 1991; Stigler, 1971).
- Political influence, lobbying, and campaign contributions in financial regulation and firm outcomes (e.g., Grossman and Helpman, 2001; Mian, Sufi, and Trebbi, 2010; Igan and Mishra, 2014; de Figueiredo and Richter, 2014).
- Revolving door dynamics between industry and regulators and related labor-market issues (e.g., Lucca, Seru, and Trebbi, 2014; Che, 1995; Shive and Forster, 2017).
- Bank governance, supervision, and risk taking (e.g., Laeven and Levine, 2009; Buch and DeLong, 2008; Berger and Bouwman, 2013).
- Measurement and empirical evidence on lobbying, political connections, and preferential access to finance (e.g., Claessens, Feijen, and Laeven, 2008; Cooper, Gulen, and Ovtchinnikov, 2010; Bertrand, Bombardini, and Trebbi, 2014).
- Policy design and critiques of prevailing bank-regulation frameworks (e.g., Admati and Hellwig, 2013; Myerson, 2014; Barth, Caprio, and Levine, 2006, 2012).

### Representative types of contributions in the reference list
- Theoretical frameworks on regulation, capture, and political economy (e.g., Peltzman, 1976; Downs, 1957; Becker, 1983; Tullock, 1972).
- Empirical analyses of lobbying, campaign contributions, and access to policymakers (e.g., Kalla and Broockman, 2016; Kroszner and Stratmann, 2005; Hart, 2001).
- Case studies and historical/policy accounts related to financial crises and regulation (e.g., Mian, Sufi, and Trebbi, 2010; Igan, Mishra, and Tressel, 2012).
- Policy-oriented books and edited volumes on preventing regulatory capture and improving regulatory design (e.g., Carpenter and Moss, 2013; Zingales, 2013; Drutman, 2015).

### Figures and key statistics extracted from the figures and captions
- Figure: "Lobbying Spending by Financial Industries (percent of total spending by the financial industry in 1998-2016)" — breakdown of shares:
  - Banks: 16%
  - Accountants: 3%
  - Finance companies: 7%
  - Insurance: 32%
  - Miscellaneous: 5%
  - Real Estate: 18%
  - Securities & investment: 19%
  - Note: "Miscellaneous mainly include companies providing financial data, consulting, and support services (e.g., Bloomberg LP, Experian)."
- Figure: "Lobbying by Banks and Other Financial Industries (in percent of industry value added)" — y-axis tick labels preserved as presented:
  - 0.008%
  - 0.010%
  - 0.012%
  - 0.014%
  - 0.016%
  - 0.018%
  - 0.020%
  - Time span on figure: 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
  - Series shown: "Banks" and "FIRE excl. banks"
- Timeline of major U.S. policy acts annotated in figure context (as presented in figure):
  - Financial Services Modernization Act of 1999 (repeal of Glass-Steagall)
  - Commodity Futures Modernization Act of 2000 (exemption of derivatives, including credit default swaps)
  - American Homeownership and Economic Opportunity Act of 2000
  - American Dream Downpayment Act of 2003 (increase in federal housing support programs)
  - Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (strengthening creditor rights)
  - Emergency Economic Stabilization Act of 2008 (authorization of TARP)
  - Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank")

### Implications emphasized across the referenced works (as reflected in titles and outlets)
- Political economy mechanisms (lobbying, campaign contributions, political connections) materially influence financial regulation, supervisory outcomes, and firm-level allocation of resources.
- Institutional design of regulators (number of regulators, independence, revolving door policies) affects risk-taking incentives and regulatory effectiveness.
- Empirical evidence links political influence and industry lobbying to market outcomes including access to finance, procurement allocation, and bank failure resolution.

*Source: References and figure captions from wpiea2019171-print-pdf - References (IMF).*

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_Source: https://www.imf.org/-/media/files/publications/wp/2019/wpiea2019171-print-pdf.pdf_