Finance Seminar（2016-17）

Topic:Unintended Consequences of Government Bailouts: Evidence from Bank-dependent Borrowers of Large Banks

Speaker:Yupeng Lin, National University of Singapore

Time:Wednesday, 21 September, 10:00-11:30

Place:Room 217, Guanghua Building 2

Abstract:

Using the Troubled Asset Relief Program (TARP) as a laboratory, this paper examines the impacts of bank bailouts on bank-dependent clients. We find that large TARP recipient banks reduce credit supply to dependent borrowers in the post-TARP period. Such effect is more pronounced when recipient banks hoard more liquidity ex-post. We further show that a large fraction of credit supply reduction is due to regulatory uncertainty. This negative shock via credit channel causes dependent borrowers to become more constrained financially. Ex-ante analysis also reveals a significant valuation loss for these borrowers around the announcements of their main banks’ TARP approvals.

Introduction:

Dr. Yupeng Lin is an Assistant Professor of Accountancy at the National University of Singapore. Prior to that, he was an Assistant Professor of Accountancy at the City University of Hong Kong. Dr. Lin’s primary research interests focus on financial institutions and information economics. His research has been published in major accounting and finance journals, including The Accounting Review, Journal of Accounting and Economics, and Journal of Financial and Quantitative Analysis. Dr. Yupeng Lin earned a Bachelor from the Sun Yat-Sen University in 2008 and Ph.D. in Finance from the National University of Singapore in 2014.

http://bizfaculty.nus.edu/faculty-profiles/496-yu-peng

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