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...

On September 17, 2009, Boston Private Financial Holdings (BPFH) sold its Coral Gables, Florida based Gibraltar Private Bank & Trust subsidiary for $93 million. On October 27, 2009, Scott Rothstein fled to Morocco on a private jet before turning himself in to authorities. Mr. Rothstein has...

This paper finds that banks that offered lower opening bids were rewarded with significantly lower warrant repurchase prices in transactions that raised $2.856 billion in 2009. These results were scaled by third-party consultants' and the Congressional Oversight Panel's estimates of the...

This paper tests whether poorly capitalized banks with troubled loan books are more likely to miss their bailout dividends. Privately held banks with weaker core capital ratios, more charged off loans, more allowances for loan losses, and more non-performing loans are more likely to miss their...

On December 10, 2009, the auction of JP Morgan Chase's warrants raised gross proceeds of $950 million, topping the previous warrant auction record of the 1983 Chrysler warrants in real and nominal terms. This paper analyzed the results from the secondary market trading on December 9, 2009, of...

The Legacy Loans Program is an elaborate way of slicing the FDIC's receivership assets. At best, the financial structure is irrelevant to the FDIC's expected long-run recovery rates. Yet, it may boost short-term prices by creating bond insurance liabilities that will come due several years down...

The U.S. Treasury began auctioning its warrant holdings in December 2009. Nevertheless, this was not the first large auction of warrants. The U.S. Treasury auctioned its holdings of warrants from the bailout of Chrysler Motors in 1983. That warrant auction resulted in an implied volatility of...

This paper formally models the Public Private Investment Partnership (PPIP), a plan for U.S. government sponsored purchases of distressed assets. This paper solves both the problem of the asset manager buying toxic assets and the banks selling toxic assets. It solves for the fair market value of...