Want A Better Loan From A Bank? Rob It!

September 22, 2015 in Daily Bulletin

The Economist seemingly encouraged bank robberies, pointing out all the benefits they bring:

  • After banks are robbed, loan officers sanction the same number of loans, but offer better terms for each loan.
  • Interest rates are lower, and borrowers have 70% more time to pay the loans.
  • They do require more collateral but for the honest bank thief who truly intends to pay back their loan this isn’t much of a problem.
  • The reason seems to be that offering better loans means that nervous or traumatized loan officers have to spend less time haggling over terms with each new customer.
  • The higher collateral means that loan officers also have to spend less time vetting customers.
  • The effect is only seen when bank robberies are violent. Non-violent ones don’t lead to the same sort of traumatized avoidance behaviour.
  • The effect lasts about 90 days.

Read more about the study that found the effect, and other details here.

Source: The Economist