Greed or good deeds: An examination of the relation between corporate social responsibility and the financial performance of U.S. commercial banks around the financial crisis
We examine the relation between banks' corporate social responsibility (CSR) and financial performance in a context of the recent financial crisis. We find that banks, in general, appear to be rewarded for being socially responsible as financial performance is positively and significantly related to CSR scores. We find that the biggest banks pursue socially responsible activities to a significantly greater extent than smaller banks. Further, the largest banks see a steep increase in CSR strengths and a steep drop in CSR concerns after 2009. 2016 Elsevier B.V. All rights reserved. 'Any modern economy needs a financial system, not only to process payments, but also to transform savings in one part of the economy into productive investment in another part of the economy. However, the Obama administration had decided, like the George W. Bush and Bill Clinton administrations before it, that it needed this financial system a system dominated by the thirteen bankers who came to the White House in March. Their banks used huge balance sheets to place bets in brand new financial markets, stirring together complex derivatives with exotic mortgages in a toxic brew that ultimately poisoned the global economy. In the process, they grew so large that their potential failure threatened the stability of the entire system, giving them a unique degree of leverage over the government." (13 Bankers: Wall Street Takeover and the Next Financial Meltdown by Simon Johnson and James Kwak, Randomhouse, 2010.