Electoral cycles in savings bank lending
b'We provide causal evidence that German savings banks \\u2013 where local politicians are by law involved in their management \\u2013 systematically adjust lending policies in response to local electoral cycles. The different timing of county elections across states and the existence of a control group of cooperative\\nbanks \\u2013 that are very similar to savings banks but lack their political connectedness \\u2013 allow for clean identification of causal effects of county elections on savings banks\\u2019 lending. These effects are economically meaningful and robust to various specifications. Moreover, politically induced lending increases in incumbent party entrenchment and in the contestedness of upcoming elections.'