How Big Data Ties Politically Connected Bankers to Pre-TARP Insider Trading
Episode Description
Insider trading by politically connected bankers spiked just before the massive bailouts of October 2008, new research by Wharton accounting professor Daniel J. Taylor and colleagues shows. 📂 Public Policy 🏷️ Research
Brief Summary
Daniel Taylor discusses insider trading linked to political connections during the financial crisis and implications for regulations and conflicts of interest.
Key points
- Surprising Findings on Crisis Anticipation. The research found no evidence that insiders anticipated the financial crisis through trading.
- Political Connections and Insider Trading. The study reveals that insiders with political connections traded more during the financial crisis.
- Pervasive Correlations in Trading. The discussion reveals that correlations in trading are widespread, especially among politically connected individuals.
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Episode highlights
- Surprising Findings on Crisis AnticipationThe research found no evidence that insiders anticipated the financial crisis through trading.“There was no evidence that insiders traded in anticipation of the crisis.”2:21Sep 26, 2016
- Political Connections and Insider TradingThe study reveals that insiders with political connections traded more during the financial crisis.“Insiders traded more heavily during the financial crisis.”3:10Sep 26, 2016
- Pervasive Correlations in TradingThe discussion reveals that correlations in trading are widespread, especially among politically connected individuals.“These correlations are so pervasive that they generate large sample results.”21:04Sep 26, 2016
Tension
55/ 100Some tension
