Annalaura Ianiro and Francesco Privitera (LUISS)

Mer, 11/02/2016 - 12:00 / 13:30

404a, Viale Romania, 32

  • Speaker: Annalaura Ianiro (LUISS)
  • Title: The “Too Big To Fail” Subsidy in Banking Competition
  • Abstract: After the last financial crisis, the phenomenon of Too Big To Fail (TBTF) financial institutions is calling for a redefinition of the banking model and its relationship with competition issues and authorities. The aim of this work is to analyze the effect of the TBTF subsidy (or, more in general, of a systematic bailout regime) on the competition of the banking sector. I develop a model with two banks, competing à la Bertrand over the bond market and the loan market. I consider a game where the first stage (bond market decision) acts as a capacity constraint for the second stage (loan market decision). After reviewing the results for the symmetric static game, I will present the asymmetric one, focusing on the dynamics and distortions the presence of the subsidy creates in the behavior of banks.


  • Speaker: Francesco Privitera (LUISS)
  • Title: Fulfillment of Electoral Promises and the Political Budget Cycle: Evidence from Italian Municipalities
  • Abstract: The degree to which politicians “walk the walk” relatively to their electoral promises is a topic on which empirical political economy research has been relatively lacking. Using a newly constructed dataset based on Italian municipalities, this paper aims at contributing to this field, by showing that mayors’ unfulfilled spending promises are much greater in electoral years with respect to the rest of their term. This is especially true for lame duck mayors who have no re-election incentives. A number of robustness checks seem to confirm that the results arise as a consequence of intentional manipulation by the politicians, who behave credibly during their term while then vastly overpromising those expenditures which are more relevant to voters just before elections.