Winning connections? Special interests and the sale of failed banks

We study how banks’ special interests affect the resolution of failed banks. Using a sample FDIC auctions between 2007 and 2016, we find that bidding banks lobby regulators have higher probability winning an auction. However, incurs larger costs in such auctions, amounting to 24.8 percent total losses. also show lobbying winners match less well with acquired display worse post-acquisition performance than their non-lobbying counterparts, suggesting interferes efficient allocation Our results provide new insights into bank process role interests.