Banks that lobby more likely to be treated favourably - ECB paper

Aug 5 Banks that spend money on
lobbying or hire former regulators are more likely to get
favourable treatment from their watchdog agency, according to a
European Central Bank paper published on Wednesday.

While lobbying in the United States has been subject to
extensive disclosure for years, European authorities only
started to tighten the rules in recent months. Companies that
want to meet with officials are now obliged to join a register
and their meetings are logged.

The ECB paper, based on data from about 780 U.S. banks,
found that lenders which have lobbied, hired a former regulator
or government official, or are otherwise close to the
authorities are less likely to face additional sanctions if
their capital ratios fall below the minimum threshold.

They also tend to have higher Fitch Bank Support Ratings,
meaning they are considered more likely to receive public-sector
help if they are at risk of default, the paper found.