In the absence of a firm-level measure of political risk, these prior papers provide some important first evidence on how variations in exposure to aggregate sources of political risk, such as federal elections, or a given industry’s dependence on government contracts, affects asset prices, investments, employment, and the business cycle \citep*{RN2665}. Amid a range of measures of aggregate political uncertainty in an economy,[3] the Economic Policy Uncertainty measure developed by \citet*{bakerbloomdavis2016} has perhaps been the most influential in work probing the effects of aggregate sources of political risk. Most closely related to our work are studies that have examined the association between a firm’s sensitivity to EPU and credit market outcomes  outcomes \citep{RN2661,RN2651,RN2662,RN2650,RN2649,RN2664,RN2663}. Using measures of aggregate political risk (exposure), such as firm's sensitivity to EPU, masks not only much of the variation in political risk, which varies significantly within-firm over time as well as between firms in a given industry, but also puts severe limits on the possibility to study policy-relevant questions such as how political risk transmits through financial markets. With EPU measures common across all financial institutions, a further probing of the effects of the considerable heterogeneity in bank political risk that we document, is out-of-reach. Indeed, using a time-varying firm-level measure of political risk allows us to address several questions that the literature has not previously been able to answer. These questions include not just examining whether and how a shock to the lender’s political risk is transmitted to borrowers, but also extend to considering potential network effects, where the lender’s political risk affects other lenders in a syndicate or where the political risk of borrowers in a lender’s portfolio aggregates into heightened exposure of certain lenders. In addition, we can now carefully map out the “management” of political risk by both lenders and borrowers using their lobbying and election campaign donations to trace their respective response to exposures. Finally, we can explore whether financial institutions use more “passive” management of political risk, not by engaging in campaign spending, but by retrenching from certain lending activities.