Fear, Anger and Credit. On Bank Robberies and Loan Conditions

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• Steven Ongena, Professor in Banking at the University of Zurich and the Swiss Finance Institute, Research fellow of CEPR.
• Wednesday 11 November 2015, 10:30-12:00
• Cambidge Judge Business School, W2.02.

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We study the impact of emotions on real-world decisions made by loan officers by analyzing the loan conditions of loans granted immediately after a bank branch robbery. We find significant differences in conditions of the loans granted after a robbery compared to changes in loan conditions that occur contemporaneously at unaffected branches. In general loan officers seem to adopt so-called avoidance behaviour. In accordance with the literature on posttraumatic stress their avoidance behavior is halved within two weeks after the robbery and the effect further varies depending on the presence of a firearm during the robbery.

This talk is part of the Finance & Accounting Seminar Series series.

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• CERF and CF Events
• Cambidge Judge Business School, W2.02
• Finance & Accounting Seminar Series

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