Local preferences affect US bank lending to minorities – research

Banks’ lending to ethnic minorities is impacted by how averse their stakeholders are to inequality, researchers at the Federal Reserve Bank of New York find. 

Bank lending to ethnic minorities varies substantially, authors Matteo Crosignani and Hanh Le say in their paper. If stakeholders in the area of a bank branch are more averse to inequality, there is a smaller loan approval gap for minorities. 

Lenders may want to reflect the beliefs and preferences of their stakeholders, the authors say. 


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