Interlocking directorates and competition in banking

Cultura

The presence of directors on the boards of competing firms (‘interlocking directorates’) raises concerns about collusion. This column studies the Italian corporate loan market and exploits a reform that prohibited directors of Italian banks from sitting on multiple boards simultaneously. Comparing treated and control loans before and after the policy, it shows that the ban resulted in a significant reduction in loan rates, consistent with pre-reform collusive behaviour. The results support

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