Banks through the Lens of the Media

This is the first study evaluating whether depositors and supervisors should be concerned about media bias in banks’ coverage. The Basel Committee on Banking Supervision (1998) points out the media’s role as a secondary information source to depositors. Especially in times of (financial) crises, depositors need to be informed about their bank and the banking system’s safety. For this paper, we collect a unique data set containing almost 700,000 statements on more than 1,500 banks in 51 regional and 6 national German newspapers over 2007-2013. First, applying text analysis techniques, we quantitatively assess bank (type) coverage and sentiment. While regional and national outlets cover approximately the same number of banks and publish about the same amount of articles, we find that articles in national-wide newspapers require a higher literacy level. The main difference becomes apparent through sentiment analysis. On average, savings and cooperative banks are pictured more negatively in national than in regional newspapers. However, all news assess commercial banks most negatively, on average. Second, we describe the connectivity of newspapers and banks through geographical and network-driven distance measures. We thus provide a network perspective on banks throughout the crisis. Finally, we detect significant differences between regional and national newspapers using a difference-in-difference regression model, pointing to biases in coverage and sentiment.