Our paper explores the political determinants of bank cash holdings. We show that banks in more corrupt countries hoard more cash. Notwithstanding, a higher level of the rule of law alleviates this effect. Furthermore, we also offer that this effect only holds for Non-Common Law countries. Additionally, we highlight the impact of election years on the decision of banks to increase reserves. Our results are robust to several specifications, including a propensity score matching approach.
Comissão Organizadora
Anderson Odias da Silva
Claudia Yoshinaga
Ricardo D. Brito
Felipe Saraiva Iachan
Vinicius Augusto Brunassi Silva
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