Elections influence bank lending in eurozone, study finds

Bank of Finland research suggests pre-poll uncertainty raises cost of loans


Banks in Europe tend to increase the cost of loans in the run-up to general elections, research from the Bank of Finland has found.

The paper by Zuzana Fungáčová, Eeva Kerola and Laurent Weill examined changes in eurozone bank lending in the months before elections between 2010 and 2020. It found that banks tended to charge more for corporate and housing loans and issue fewer mortgages during these periods.

The authors cite two prevailing theories about why elections might affect bank lending. 


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