John Maffey

Date of Award


Degree Name

Master of Arts


Political Science

First Advisor

Neil Pinney

Second Advisor

Neil Pinney

Access Setting

Masters Thesis-Open Access


This study focuses on the cycle of politics and banking by analyzing the relationship amongst the three primary actors within the domestic financial subsystem; regulatory agencies, the banking industry, and members of Congress. The cycle consists of three stages; loosening or deregulatory behavior, tightening or reregulatory activity, and re-loosening, which is a return to deregulation. Legislation does not distinguish the stages, rather it ratifies existing behavior. Prior to legislative action, regulators grant bankers similar authority in an effort to enhance profitability or fend off competitors. Regulatory agencies provide mostly objective, non-partisan advice to Congress and supervision of the industry, acting to reduce the effects of the exigencies which arise within a regulated industry operating in a free market system.

Technology has been the primary motivation for changes within the banking industry to include pressuring Congress and regulators to license more expansive banking powers, to maintain the viability of the industry. How the industry responds to newly authorized business lines shall determine congressional behavior going forward. Federally subsidized depositor insurance assures a continuation of federal regulation of the industry, and therefore sustains the cycle.