Abstract

http://ssrn.com/abstract=2026988
 
 

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Are the Bailouts of Wall Street Complements or Substitutes?


Linus Wilson


University of Louisiana at Lafayette - College of Business Administration

Yan Wu


Wilfrid Laurier University

Stephanie Prejean


affiliation not provided to SSRN

March 21, 2012

Midwest Finance Association 2013 Annual Meeting Paper

Abstract:     
The Term Securities Lending Facility (TSLF) lent $2.3 trillion worth of general collateral to eighteen 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.

Number of Pages in PDF File: 33

Keywords: bailout, Capital Purchase Program (CPP), CEO pay, Dodd–Frank emergency lending, Federal Reserve, financial crisis, general collateral, investment banks, primary dealers, repos, section 13(3), securities dealers, Troubled Asset Relief Program (TARP), Term Securities Lending Facility (TSLF)

JEL Classification: G01, G18, G2, G24, G28

working papers series


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Date posted: March 24, 2012 ; Last revised: September 3, 2012

Suggested Citation

Wilson, Linus and Wu, Yan and Prejean, Stephanie, Are the Bailouts of Wall Street Complements or Substitutes? (March 21, 2012). Midwest Finance Association 2013 Annual Meeting Paper. Available at SSRN: http://ssrn.com/abstract=2026988 or http://dx.doi.org/10.2139/ssrn.2026988

Contact Information

Linus Wilson (Contact Author)
University of Louisiana at Lafayette - College of Business Administration ( email )
Department of Economics & Finance
214 Hebrard Blvd., Room 326
Lafayette, LA 70504-0200
United States
(337) 482-6209 (Phone)
(337) 482-6675 (Fax)
HOME PAGE: http://www.linuswilson.com
Yan Wu
Wilfrid Laurier University ( email )
75 University Avenue West
Waterloo, Ontario N2L 3C5
Canada
Stephanie Prejean
affiliation not provided to SSRN ( email )
Feedback to SSRN


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