Publication Date

Spring 5-2-2023

Document Type

Dissertation

Degree Name

Doctor of Philosophy in International Business Administration (Ph.D.-IB)

Committee Chair

Clarke, George R.

Committee Member

Dr. Jeffrey Brown

Committee Member

Dr. Jorge Brusa

Committee Member

Dr. Leonel Prieto

Committee Member

Dr. Antonio Rodriguez

Abstract

U.S. based bank holding companies (BHCs) exert influence at every step in the legislative process where financial regulatory reforms are enacted into law, such as the Dodd-Frank Act, to promulgation of regulations. In Chapter II, we maintain that BHCs, upon facing salient regulation, lobby regulators to have their opinions heard with the goal of favorable regulatory change and to increase non-traditional revenues. We undertook a novel collection of political and financial data from 2003 to 2018, matching 180 pairs of parsed proposed and final regulations. BHCs that participated in commenting on proposed rules are highly successful at having their views noted in the final regulation, and other forms of lobbying increased this success. We fill an instrumental gap in financial literature, as we confirm that BHCs may well lobby regulators to preserve gains in all important, yet risky revenues.

In Chapter III, we ask how these non-traditional revenues and separately, systemic risk, impact BHC value and share price volatility. Surprisingly few scholars have explored the effect of revenues or systemic risk upon BHC value. An increase in the use of aggregate non-tradtional revenues or an increase of systemic risk, using Marginal Expected Shortfall, led to a decline in value of the BHC. It further led to a sharp increase share price volatility, illustrating a process of negative feedback loops.

Lastly, in Chapter IV, it is demonstrated that the U.S. Congress struggles in lifting the statutory debt limit in a timely manner, while tied to appropriations legislation. We maintain that Google Trends Economic Policy Uncertainty (EPU) and Interest Group Competition/conflict take a toll on U.S. Treasury Bill Yield Spread during contentious debt ceiling crises. We did so by employing auto-regressive distributed lag model on a novel collection of financial and political time series data from 2010 to 2016, at daily intervals. Our EPU proxy and Interest iv Group Competition/Conflict led to a decrease in Treasury Yield Spreads and increased excess borrowing costs owed by the U.S. Treasury, due in part to the default premium. By examining all three chapters, we touch on the good, the bad, and the ugly of lobbying and political influence in finance.

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