FEAR,ANGER, AND CREDIT. ON BANK ROBBERIES AND LOAN CONDITIONS |
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Authors: | Paola Morales-Acevedo Steven Ongena |
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Institution: | 1. Central Bank of Colombia, Bogota, Colombia;2. Professor of banking in the Department of Banking and Finance, University of Zurich, 8032 Zurich, Switzerland |
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Abstract: | 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 between the conditions of loans granted after a robbery and changes in loan conditions that occur contemporaneously at unaffected branches. In general, loan officers seem to adopt so-called avoidance behavior. In accordance with the literature on posttraumatic stress, their avoidance behavior is halved within 2 weeks following the robbery and the effect further varies depending on the presence, or absence, of a firearm during the robbery. (JEL G02, G2) |
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