Political connections and informed trading: Evidence from TARP

Ozlem Akin, Nicholas Coleman (), Christian Fons-Rosen and Jose-Luis Peydro

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We study insider trading behavior surrounding the largest bank bailout in history: TARP. In politically-connected banks, insider buying during the pre-TARP period is associated with increases in abnormal returns around bank-specific TARP announcement; for unconnected banks, trading and returns are uncorrelated. Results hold across insiders within the same bank and are stronger for finance-related government connections. Through a FOIA request we obtained the previously undisclosed TARP funds requested; the ratio of received to requested funds correlates both with abnormal returns and insider buying behavior in connected banks.

Keywords: Political connections; Political economy in banking; Insider trading; TARP; bank bailouts (search for similar items in EconPapers)
JEL-codes: D72 G01 G21 G28 (search for similar items in EconPapers)
Date: 2016-10, Revised 2021-03
New Economics Papers: this item is included in nep-ban
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://econ-papers.upf.edu/papers/1542.pdf Whole Paper (application/pdf)

Related works:
Journal Article: Political connections and informed trading: Evidence from TARP (2021)
Journal Article: Political connections and informed trading: Evidence from TARP (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1542

Access Statistics for this paper

More papers in Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).