Are the Bailouts of Wall Street Complements or Substitutes?

Linus Wilson (), Yan Wendy Wu and Stephanie Prejean ()

Atlantic Economic Journal, 2014, vol. 42, issue 1, 38 pages

Abstract: The Term Securities Lending Facility (TSLF) lent $2.3 trillion worth of general collateral to 18 investment houses in exchange for riskier securities. Treasury collateral was in high demand in 2008 and 2009 as repo markets shunned lower quality collateral. This paper finds a negative and significant relationship between participating in the TSLF and having funds from the Troubled Asset Relief Program (TARP) and other Federal Reserve lending programs. Thus, it appears that the TSLF was a substitute for other bailouts. In addition, dealers with higher paid CEOs were more likely to borrow in the next TSLF auction cycle. Copyright International Atlantic Economic Society 2014

Keywords: Bailout; Banks; Capital Purchase Program (CPP); CEO pay; Discount window; Dodd–Frank Wall Street Reform Act of 2010; Emergency lending; G01; G18; G2; G24; G28 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11293-013-9395-x

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