Findings on Investment Discussed by Investigators at Federal Reserve Bank of Philadelphia (Democratic Political Economy of Financial Regulation): Investment

2026 JAN 19 (NewsRx) -- By a News Reporter-Staff News Editor at Politics, Law & Government Daily -- Researchers detail new data in Investment. According to news reporting originating from Philadelphia, Pennsylvania, by NewsRx correspondents, research stated, “We establish that inefficiently lax financial regulation can arise democratically. Lax regulation leads to banks issuing risky mortgages at less than actuarially fair interest rates.”

Financial support for this research came from Bank of Canada.

Our news editors obtained a quote from the research from the Federal Reserve Bank of Philadelphia, “This creates additional demand for houses and increases house prices, generating nontrivial distribution of winners and losers. Renters and individuals with large nonhousing wealth suffer from the induced banking fragility, while young middle-wealth households benefit from mispriced mortgages and old homeowners benefit from higher house prices. When these latter two groups constitute a majority, regulatory failure can be a democratic outcome.”

According to the news editors, the research concluded: “Voting patterns in US Congress provide empirical support for this mechanism.”

This research has been peer-reviewed.

For more information on this research see: Democratic Political Economy of Financial Regulation. International Economic Review, 2025. International Economic Review can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA. (Wiley-Blackwell - http://www.wiley.com/; International Economic Review - http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1468-2354)

The news editors report that additional information may be obtained by contacting Igor Livshits, Federal Reserve Bank of Philadelphia, Philadelphia, PA 19106, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1111/iere.12781. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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