TY  - UNPD
A1  - Mücke, Christian
A1  - Pelizzon, Loriana
A1  - Pezone, Vincenzo
A1  - Thakor, Anjan V.
T1  - The carrot and the stick: bank bailouts and the disciplining role of board appointments
T2  - SAFE working paper ; No. 316
N2  - We empirically examine the Capital Purchase Program (CPP) used by the US gov- ernment 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 ap- point 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.
T3  - SAFE working paper - 316 
KW  - Bank Bailout
KW  - TARP
KW  - Capital Purchase Program
KW  - Dividend Payments
KW  - Board Appointments
KW  - Bank Recapitalization
Y1  - 2021
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/61435
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-614350
IS  - 6th July, 2021
PB  - SAFE
CY  - Frankfurt am Main
ER  -