Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5089344 | Journal of Banking & Finance | 2013 | 14 Pages |
Abstract
This paper investigates the long-run recovery experience of US banks that received capital infusions under the Capital Purchase Program (CPP), a part of the Troubled Asset Relief Program (TARP). Based on a dynamic recovery model, our results show that recovering CPP banks tended to be in better financial condition than other CPP banks. Long-run event study analyses of common stock prices reveal that, in the quarter after repayment of TARP funds, CPP banks experienced economically large and significant buy-and-hold wealth gains of 14%, equivalent to approximately $329Â billion. We conclude that TARP was successful in fostering bank financial and stock price recovery.
Related Topics
Social Sciences and Humanities
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Economics and Econometrics
Authors
Wei Liu, James W. Kolari, T. Kyle Tippens, Donald R. Fraser,