![Robert C. Vackar College of Business & Entrepreneurship](../../assets/md5images/f1a784c46513e2b56154ae4ea15c7848.jpg)
Economics and Finance Faculty Publications and Presentations
Did the U.S. Treasury’s capital purchase program (CPP) help bank lending and business activity?
Document Type
Article
Publication Date
6-17-2012
Abstract
The 2008 financial crisis led the U.S. Treasury to implement the capital purchase program (CPP) to revive commercial bank lending and hence stimulate business activity. Employing dynamic panel techniques and methodologies from the bank lending channel literature we find that after controlling for asset size, bank capital, and macroeconomic variables (real GDP growth rate and interest rate spreads), the impact of the CPP program is statistically significant only for money center banks. However, over our sample period from 2008Q3 to 2009Q4 we find a very modest impact on lending by only the largest banks. Overall, our results suggest that CPP’s business objective to boost loan growth and hence business activity during the crisis remained unfulfilled.
Recommended Citation
Egly, P.V., Mollick, A.V. Did the U.S. Treasury’s capital purchase program (CPP) help bank lending and business activity?. Rev Quant Finan Acc 40, 747–775 (2013). https://doi.org/10.1007/s11156-012-0297-9
Publication Title
Rev Quant Finan Acc
DOI
10.1007/s11156-012-0297-9
Comments
Copyright © 2012, Springer Science Business Media, LLC
https://rdcu.be/c3DMV