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Did Saving Wall Street Really Save Main Street? The Real Effects of TARP on Local Economic Conditions

Berger, Allen N. - 2016

We investigate whether saving Wall Street through the Troubled Assets Relief Program (TARP) really saved Main Street during the recent financial crisis. Our difference-in-difference analysis suggests that TARP statistically and economically significantly increased net job creation and net hiring...

Persistent link: https://www.econbiz.de/10013006410

U.S. Bank Structure, Fragility, Bailout, and Failure during the U.S. Financial Crisis

Lu, Wenling - 2016

likelihood of a bank bailout or failure during the late 2000s financial crisis. The empirical results indicate that established … received bailout funds are similar except that holding a large proportion of nonperforming loans reduced the likelihood that a … bank received bailout funds. Overall, these results are consistent with regulators providing bailout funds to banks that …

Persistent link: https://www.econbiz.de/10013008003

Bank Rescues and Bailout Expectations : The Erosion of Market Discipline During the Financial Crisis

Hett, Florian - 2016

spreads, and equity returns. We use our method to analyze the evolution of bailout expectations during the recent financial … crisis. We find that bailout expectations peaked in reaction to government interventions following the failure of Lehman …

Persistent link: https://www.econbiz.de/10013008249

Evidence on the Troubled Assets Relief Program, Bailout Size, Returns and Tail Risk

Ncube, Mthuli - 2019

market response to the TARP launch. We reject the null hypothesis that the bailout size has no effect on the firm's value … average buy-and-hold return from 2008 Q4 to 2009 Q1 is 42.68% for the 293 sampled banks. Bailout banks perform 5.8% worse than … non-bailout banks. The banks' losses increase significantly from the pre-TARP period to TARP initiation period, suggesting …

Persistent link: https://www.econbiz.de/10012862020

Bailouts and Moral Hazard : How Implicit Government Guarantees Affect Financial Stability

Mariathasan, Mike - 2014

The recent crisis has shown that systemically relevant banks in distress are likely to benefit from governmental support. This reduces their downside risk and leads to moral hazard, i.e. to incentives for these banks to assume excessive risks. In this paper we show empirically that implicit...

Persistent link: https://www.econbiz.de/10013049033

When Good Investments Go Bad : The Contraction in Community Bank Lending After the 2008 GSE Takeover

Rice, Tara - 2014

In September 2008, the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac were placed into conservatorship and dividend payments on common and preferred shares were suspended. As a result, share prices fell to nearly zero and many banks across the country lost the value of their...

Persistent link: https://www.econbiz.de/10013057066

Paulson Plan Credits

de Bodt, Eric - 2014

The Capital Purchase Plan (CPP) is one of the main ingredients of the Paulson Plan. In accordance with CPP, U.S. federal agencies invested more than $200 billion in approximately 700 financial institutions between 2008 and 2009. This article examines whether this major public intervention helped...

Persistent link: https://www.econbiz.de/10013059213

Bank Bailouts and Competition - Did TARP Distort Competition Among Sound Banks?

Koetter, Michael; Noth, Felix - 2015

. Political indicators reveal bailout expectations after 2009, manifested as beliefs about the predicted probability of receiving … was lower, and loan rates were higher for banks with higher bailout expectations. The interest margins of unsupported …

Persistent link: https://www.econbiz.de/10013020652

Bailouts of Systemically Relevant Banks Do Not Create Moral Hazard

Birchler, Urs - 2016

Many economists and policy-makers believe that bailouts of systemically important financial institutions (SIFIs), though unavoidable ex post, are inefficient ex ante: The expectation of such bailouts is said to lead to moral hazard in the form of excessive risk taking. We argue that this view...

Persistent link: https://www.econbiz.de/10012986783

Bank Bailouts in Europe and Bank Performance

Gerhardt, Maria - 2018

equity ratio, loan quality and bank size are the main determinants of bank bailout involvement. However, the aided banks …

Persistent link: https://www.econbiz.de/10012934952