Finance and politics: New insights

Thorsten Beck, Orkun Saka and Paolo Volpin

A rapidly expanding literature has shown the importance of political economy factors for legislative and regulatory actions in the financial sector and ultimately financial sector stability and efficiency. This column reports on recent research in this field, presented at the first London Political Finance, including work on financial fragility leading to the rise of right-wing extremist parties, private interests in financial regulation, financial gains from political connections, political beliefs and financial decisions and the role of media in financial decisions. It lays out some of the important takeaways and suggests directions for further research that can shed light on the remaining issues.