题目：Does TARP Work? A Dynamic Analysis on Banks' Loan to Asset Ratio

主讲人：Shuoxun Zhang, Associate Professor, Southwestern University of Finance and Economics

Abstract

One of the fundamental objectives of the Troubled Asset Relief Program (TARP) is to stimulate bank loan growth. Using estimated CAMELS rating as instruments and 16 quarters of bank data, I investigate the effectiveness of TARP in terms of banks loan to asset ratio(LTA). Considering both commercial banks and bank holding companies(BHC), my result shows that TARP stimulate recipients' LTA growth only for commercial banks, with an average increase of 80 percentage points in LTA comparing to the average LTA before TARP treatment. Under the commercial bank category, only the small and medium banks show positive and significant growth in LTA, with 88 and 79 percentage point increase respectively. However, it turns out that TARP imposes a negative effect in terms of LTA for BHCs. There is a significant decrease of 31 percentage point in TARP BHC's LTA. And the very large banks show a significant drop of 87 percentage points in LTA, which dominates the other sizes of banks.