This paper develops a formula to numerically estimate the unsubsidized, fair-market value of the toxic assets purchased with Federal Reserve loans. It finds that subsidy rates on these loans were on average 33.9 percent at origination. In contrast, by the 3rd quarter of the 2010, there was on...

This paper develops a formula to numerically estimate the unsubsidized, fair-market value of the toxic assets purchased with Federal Reserve loans. It finds that subsidy rates on these loans were on average 33.9 percent at origination. Yet, by the 3rd quarter of the 2010, there was on average no...

Most of the banks receiving capital injections from the Troubled Asset Relief Program (TARP) issued preferred stock to taxpayers. This paper looks at the factors that affect publicly traded banks' ability to pay the scheduled TARP preferred stock dividends. Smaller banks with weaker capital...

Forty-eight credit unions received capital injections as part of the financial sector bailout. The predicted probability of receiving bailout funds jumps from 29 percent to 81 percent for the typical credit union, if the institution's headquarters was in the district of a member of the U.S....

(Zheng, 2009) does not realize that the government provides nonrecourse loans to investors to buy toxic assets. Nonrecourse loans allow the borrower to walk away from the loan with no penalties besides ceding the asset that the loan purchased. Thus (Zheng, 2009)'s conclusions that less well...

Forty-eight credit unions received capital injections as part of the financial sector bailout. The predicted probability of receiving bailout funds jumps from 29 percent to 81 percent for the typical credit union, if the institution's headquarters was in the district of a member of the U.S....

This study uses a unique natural experiment to contribute to the long-running debate as to whether the demand curves for stocks slope downward. The U.S. Treasury sold 5.27 billion shares of Citigroup's common stock during trading hours in April 26, 2010, to December 6, 2010. Using a geometric...

This paper studies the factors that were associated with a bank's early exit from TARP in 2009. Executive pay restrictions were often a rationale cited for early TARP exit, and high levels of CEO pay were associated with banks being significantly more likely to escape TARP. In addition, we find...

On April 26, 2010, the U.S. Treasury had 163 trading days to sell a $37 billion dollar stake of 7.7 billion shares in Citigroup. Citigroup's stock price on April 23, 2010, was well above the U.S. Treasury's “break even” price of $3.25. The U.S. Treasury announced that it planned an...