#2185. The effect of TARP on lending: Evidence from the lead bank’s share in syndicated loans

August 2026publication date
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Journal’s subject area:
Economics, Econometrics and Finance (all);
Finance;
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Abstract:
We investigate the effect of the Troubled Asset Relief Program (TARP) on the shares of lead banks in syndicated loans by using quarterly data for the period from 20XX to 20XX. We find that TARP capital injections to lead banks have a significantly positive effect on their shares of syndicated loans. The significantly positive effect is stronger for a lead bank that is larger, has a greater appetite for risk, and is not under supervisory stress. Overall, our results show that TARP was an effective mechanism for promoting the lending of lead banks.
Keywords:
Bailout; Information asymmetry; Syndicated loans; TARP

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