Political risk, considered mainly as a country-level risk affecting banks' operations and valuations, especially in emerging markets (see, e.g., Erb et al., 1996), is less postulated in the context of a developed market. The goal of this dissertation is to theoretically and empirically explore the underdeveloped and, due to its interdisciplinary nature, neglected or insufficiently identified field of political risk in financial institutions. I begin this with a meta-synthesis review to integrate the current incoherent studies into a clear, detailed, and articulated framework. I then empirically address some novel questions about the impact of government and central bank intervention on bank stability and the sovereign-bank nexus, focusing on developed markets rather than emerging markets.
