Fed paper studies the effect of Tarp on bank risk-taking
An international finance discussion paper released in March by the board of governors of the US Federal Reserve System considers the effect of the Troubled Asset Relief Programme (Tarp) capital injections on bank risk-taking.
Authors Lamont Black and Lieu Hazelwood analyse the risk ratings of banks' commercial loan originations during the crisis and find that, relative to non-Tarp banks, the risk of loan originations increased at large Tarp banks but decreased at small Tarp banks.
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