In May, three IMF staffers published a working paper with National Bureau of Economic Research, A Fistful of Dollars: Lobbying and the Financial Crisis, pointing out the role of lobbying by financial firms for lax regulation which directly led to the 2008 subprime crisis. The authors argue that the mortgage lenders who lobbied most aggressively for deregulation increased their risk taking and thus had worse outcomes during the crisis. The paper concludes: "Our analysis suggests that the political influence of the financial industry can be a source of systemic risk. … The prevention of future crises might require weakening political influence of the financial industry or closer monitoring of lobbying activities."
IMF paper finds lobbying contributed to financial crisis
13 June 2011