It is good to be king, as the old saying goes — and apparently it’s also good to get a seat on a congressional committee that oversees the finance industry. According to a new study, those lawmakers tend to get larger loans and at more favorable interest rates right when they get appointed to those powerful panels. Researchers suggest the evidence is no random coincidence: They say the trend may in fact expose a conduit of influence peddling in which powerful lawmakers are using their position to extract favors — and whereby Wall Street firms may be using stealth perks to increase their legislative power.
The analysis from London Business School professors Ahmed Tahoun and Florin Vasvari analyzed how the personal finances of congressional lawmakers changed once they were appointed to the Senate Finance Committee, the Senate Banking Committee or the House Financial Services Committee. It also evaluated how their finances compared with other lawmakers who are not on those panels.
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