The Carrot and the Stick: Bank Bailouts and the Disciplining Role of Board Appointments

• 成果类型: Article
• 署名作者: Mucke, Christian; Pelizzon, Loriana; Pezone, Vincenzo; Thakor, Anjan
• 署名单位: Goethe University Frankfurt; Universita Ca Foscari Venezia; Centre for Economic Policy Research - UK; Tilburg University; Washington University (WUSTL)
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.20230313
• 发表日期: 2024
• 页码: 415-462
• 关键词: independent directors evidence; time-inconsistency; moral hazard; RISK; intervention; INVESTMENT; POLICY

摘要

We empirically examine the Capital Purchase Program (CPP) used by the US government to bail out distressed banks and its implications for regulatory policy. We find strong evidence that a feature of the CPP-the government's ability to appoint independent directors on the board of an assisted bank that missed six dividend payments to the Treasury-had a significant effect on bank behavior. Banks were averse to these appointments-the empirical distribution of missed payments exhibits a sharp discontinuity at five. Director appointments by the Treasury were associated with improved bank performance and lower CEO pay.