BOFIT paper finds Turkish depositors prefer banks with political connections


Banks with former members of parliament at the helm enjoy reduced "depositor discipline", which affords them a larger deposit base and lower funding costs, according to a discussion paper published by the Bank of Finland.

The paper, Political connections and depositor discipline by Mustafa Disli, Koen Schoors and Jos Meir of the Bank of Finland's BOFIT institute, studies data from 79 Turkish banks between 1980 and 2008.

A strong political relationship between a bank and the government can be

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