UCL Department of Economics


Finance Seminar - Claire Celerier

22 November 2023, 4:00 pm–5:15 pm


Advertising and Fraud: The Rise and Fall of the Freedman's Savings Bank

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Ji Hee Yoon

Abstract: Analyzing an exhaustive dataset of newspaper items on banks spanning 1865 to 1874, we investigate advertising by the Freedman's Savings Bank, the first bank collecting deposits from African American post-Emancipation. Initially created as a benevolent institution, a charter amendment facilitated fraudulent lending to a white elite network, causing massive depositor losses. We first show that the Freedman's Savings Bank promoted itself more than any other bank during its time. Applying machine learning for textual analysis, we document a shift in advertising content post-amendment through a differences-in-differences model. The use of persuasive techniques, including false promises and prescriptive stereotypes, increased, and particularly in newspapers targeting African Americans. These findings suggest that advertising can be a channel for discrimination in financial markets.

Location: Bentham LG17

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