Arbeitspapier
The carrot and the stick: Bank bailouts and the disciplining role of board appointments
We empirically examine the Capital Purchase Program (CPP) used by the US government to bail out distressed banks with equity infusions during the Great Recession. We find strong evidence that a feature of the CPP - the government's ability to appoint independent directors on the board of an assisted bank that missed six dividend payments to the Treasury - helped attenuate bailout-related moral hazard. Banks were averse to these appointments - the empirical distribution of missed payments exhibits a sharp discontinuity at five. Director appointments by the Treasury led to improved bank performance, lower CEO pay, and higher stock market valuations.
- Sprache
-
Englisch
- Erschienen in
-
Series: SAFE Working Paper ; No. 316
- Klassifikation
-
Wirtschaft
Financial Crises
Financial Institutions and Services: Government Policy and Regulation
Corporate Finance and Governance: Government Policy and Regulation
Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
- Thema
-
Bank Bailout
TARP
Capital Purchase Program
Dividend Payments
Board Appointments
Bank Recapitalization
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Mücke, Christian
Pelizzon, Loriana
Pezone, Vincenzo
Thakor, Anjan V.
- Ereignis
-
Veröffentlichung
- (wer)
-
Leibniz Institute for Financial Research SAFE
- (wo)
-
Frankfurt a. M.
- (wann)
-
2021
- DOI
-
doi:10.2139/ssrn.3881871
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Mücke, Christian
- Pelizzon, Loriana
- Pezone, Vincenzo
- Thakor, Anjan V.
- Leibniz Institute for Financial Research SAFE
Entstanden
- 2021
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