Finance Associate Professors Kyle Allen and Ahmed Baig had their paper, “Bank-Level Political Risk and the CD Rates Charged by Money Market Funds,” accepted for publication in the Journal of Financial Services Research. Their research sheds light on the financial impact of political risk on banking institutions, particularly in the context of short-term borrowing from money market funds.
The study finds that higher political risk exposure is associated with increased borrowing costs for banks. These findings remain consistent across multiple analytical methods, including univariate and multivariate regression models, fixed effects, and propensity score matching, highlighting the strength and reliability of the results. Their research offers important insights for both financial institutions and policymakers.