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PurposeThis study investigates the relation of bank loan delinquencies to Fed Survey delinquency data from 2003 to 2017. Bank-generated loans have lower delinquencies than all Fed Survey loan types. Survey mortgage and auto loan delinquencies are positively related to bank loan delinquencies indicating complimentary delinquency decisions for borrowers. Conversely, student loans delinquencies are negatively related to bank loans, consistent with borrowers substituting student loan payments for bank debt for the entire sample period. Student loan delinquencies are negatively related to per-capita bankruptcy, and all other types of debt have a positive relation. The relation between Fed Survey loan delinquencies and bank-generated loan delinquencies is time varying and changed after the financial crisis in 2008.Design/methodology/approachSeemingly Unrelated Regression is used to study delinquencies for three bank loan types and whether or not they are related to Fed Survey loan delinquencies. The sample is split into pre-financial crisis before 2008 and post-crisis after 2008.FindingsSeemingly Unrelated Regression (SUR) results show that bank delinquencies for second mortgages and “Other” loan types are consistently complementary to Fed Survey mortgage loan delinquencies. Fed Survey auto loans delinquencies are also consistent with a complimentary relation, and these results are largely driven by the relation after the financial crisis of 2008 since pre-crisis regression results are not significant for every dependent variable. Credit card loan delinquencies have a negative and substitute relation with bank-generated first mortgage loan delinquencies prior to the crisis in 2008, and with bank-generated second mortgages after the crisis. Conversely, student loan delinquencies from the Fed Survey are negatively and significantly related to bank mortgages for the entire sample period, but only with bank-generated first mortgages after 2008. The student loan delinquency results are consistent with income smoothing, on average, although this is not explicitly tested at the micro level since this study uses macro-level data and not borrower-specific data. These findings are also consistent with conventional wisdom that student loans provide “financial slack” and borrower flexibility.Research limitations/implicationsA limiting factor is this study uses macro-level data and not borrower-specific data.Practical implicationsEmpirical findings are consistent with prior research that student loans provide income smoothing and “financial slack,” and borrowers with payment challenges will pay other debt before student loans.Social implicationsBorrowers in financial trouble tend to be delinquent for all debt, and more so for student debt.Originality/valueTo investigate whether Fed Survey delinquencies of auto loans, first mortgages, student loans and credit card loans from all sources have complementary or substitution effects with bank debt at a macro level. The study investigates whether bank debt follows “market trends” as a complementary effect, or if bank debt has a negative relation to other debt indicating a substitution effect.

We investigate the role market demographics play in determining the accounting performance of banks. Specifically, we study the effect of wealth and population to determine if these market factors drive performance, or if performance is related only to bank-specific variables. Using a sample of single-county banks, we find that market demographics play an important role in determining bank performance. Our univariate findings show banks that operate in low population counties outperform those in high population counties. We also show the lowest performing group of banks operates in counties characterized by high population and high income. Our multivariate tests confirm that as county-level population decreases, bank performance increases. Moreover, we observe a significant low-income advantage after controlling for other determinants of profitability. We also find that low population levels significantly mitigate the negative effects of the 2008 financial crisis for small, single-county banks.

There are three main reasons banks may not be lending. First, banks could be rationing credit. We show that banks have excess reserves of more than $2 trillion, so demand exceeding supply is unlikely. Second, banks could be experiencing a capital crunch. We find no evidence of a capital crunch. Third, banks could be choosing to restrict lending, creating a credit crunch. We find that postcrisis loan growth rates are lower than crisis loan growth rates, but postcrisis loan growth is similar to precrisis growth. We find no evidence to suggest that banks are systematically restricting lending.

Term auction facility (TAF) was created during the financial crisis as a substitute for the Federal Reserve’s discount window, the lender of last resort. We hypothesize if TAF borrowing is viewed as a bailout then publicly traded banks would borrow relatively fewer TAF funds to avoid a bailout stigma. We find publicly traded banks did borrow less (as a percent of total assets) in the TAF program than privately held banks. Further, too-big-to-fail banks and investment banks borrowed relatively less than other publicly traded banks indicating greater levels of public scrutiny reduces borrowing under emergency government liquidity programs. We also find that publicly traded banks pledged lower quality and less liquid collateral than private banks when borrowing under the program. Our results suggest TAF provided more benefit to traditional privately held banks with strong balance sheets that were able to borrow relatively greater amounts in anticipation of either future liquidity needs as suggested by Ivashina and Scharfstein (J Financ Econ 97:319–338, 2010) or increased lending as found by Berger et al. (The Federal Reserve’s discount window and TAF programs: “pushing on a string?” Working paper, University of South Carolina, 2014).

In this article I investigate the regulatory burden for small U.S. banks around major crisis-based regulatory programs using measures of profit, cost, and productivity from 1991 to 2014. After the passage of the Federal Deposit Insurance Corporation Improvement Act, there is little evidence consistent with increased regulatory burden. After the passage of the USA PATRIOT Act, the percentage change in employees was positive, and average pay was higher for small banks. After the passage of the Dodd–Frank Act, five of six regime-shift indicators were consistent with increased regulatory burden, with lower pretax return on assets, lower loans per employee, lower technology and fixed-asset expenditures, and higher percentage change in employees and salaries-to-assets in panel regressions.

One feature of the Dodd-Frank Act is the elimination of too-big-to-fail (TBTF) banks. TBTF is a government guarantee of large banks that has been shown to increase the value of these banks, so removing the guarantee should result in a price decline of TBTF bank stock. Using event study methods, we find very limited reaction to the process of eliminating TBTF. Specifically, there is limited reaction among the largest banks and banks receiving special attention, such as Systemically Important Financial Institutions (SIFI) banks. Instead, smaller banks not receiving special attention show some evidence of negative returns with the elimination of TBTF.

Choosing appropriate peer groups for commercial banks is important to investors comparing bank performance, for regulators evaluating safety and soundness, for bank management looking at merger alternatives or relative performance, and for bank researchers testing hypotheses and making policy judgments about the banking system. We use commercial bank financial statements with common size variables as the inputs to a cluster analysis model to identify clusters or groups of banks with financial structures that are relatively homogeneous within groups and distinct across groups. Managerial strategies and idiosyncrasies, local and global economic conditions, and the regulatory environment shape bank financial statements, and financial statements should reflect the financial and operational differences across banks. Using year-end data from 2014, we cluster 6444 banks into several such groups. Our results show that bank clusters are formed largely around loan types, funding differences, and management’s strategic choices. We compare the ability of bank clusters and bank size to explain several widely used measures of bank performance and risk in additional years. These bank clusters are shown to have substantially greater explanatory power in regression models when compared to groupings based on bank size in several different years.

We investigate whether or not market discipline on banking firms changed after the Dodd–Frank Wall Street Reform and Consumer Protection Act (DFA) of 2010. If market discipline is improved, we should see a lower discount for size on yield spreads, particularly for banks identified as too-big-to-fail (TBTF) or systemically important (SIFI). Using secondary market subordinated debt transactions we find that the size discount is reduced by 47% and TBTF discount is reduced by 94% after the DFA. The DFA has been effective in reducing, but not in eliminating the size and TBTF discounts on yield spreads. Market discipline of banks appears to have improved further after the rating criteria changes by Moody’s.

Because big banks could impact competition in rural markets, we investigate the effects of big-bank presence on the performance of rural, small banks. When competing against a big bank, rural one-county banks operate at lower levels of proit efficiency, but with higher ROA and increased levels of interest and fee income from loans. Lower profit efficiency and higher returns in the rural markets suggest that big banks possess market power in rural markets and that they can extract rents to earn higher returns with lower than average profit efficiency. Therefore, small banks in rural markets should not fear large competitors. Conversely, customers who rely on loans from rural, small banks are negatively impacted by higher rates and fees on loans when a big bank is present in the market.

The probability of informed trading (PIN) measure has been increasingly used in empirical research in finance. However, there is a growing debate as to whether PIN measures information-based or liquidity-based trading. We contribute to the discussion by estimating PIN using transaction data for one-month T-bills. Our PIN estimates exceed those reported for equities, despite it being unlikely that the probability of informed trading is higher in T-bills than equities. We conclude that PIN identifies trading clusters and that the source of the clustering depends on the economics of the market. The economics of the T-bill market suggest discretionary liquidity traders are the likely source of the clustering.

In a sample of 335 commercial banks, we do not detect a systematic effect on bank values from derivatives use in either the high growth period of 2003–2005 or the low growth period of 2007–2009. These findings apply to all types of derivatives including credit default swaps. Our results suggest that banks take a more balanced approach and restrict their derivative activities to providing derivative services for customers and risk management. We also find that the market disciplined banks significantly for taking TARP funds, indicating that receiving TARP funds was a signal that the banks were financially distressed. Lastly, we cannot discern valuation effects resulting from derivatives use even in large and poorly capitalized banks that are more likely to take risk-shifting opportunities. Collectively, we find no compelling evidence supporting the widespread allegation that derivatives use increased banks’ speculating behaviors and significantly contributed to the loss of value during the subprime mortgage crisis.

The default risk sensitivity of yield spreads on bank-issued subordinated notes and debentures (SNDs) decreased after banks started issuing trust-preferred securities (TPS). The too-big-to-fail (TBTF) discount on yield spreads is absent prior to the LTCM bailout, but the size discount doubles after the LTCM bailout. Prior to TPS issuance and the LTCM bailout, SND yield spreads are sensitive to conventional firm-specific default risk measures, but not after the bailout. We find paradigm shift in determinants of yield spreads after the LTCM bailout. Yield spreads on TPS are sensitive to default risks and can provide an additional source of market discipline.

This study investigates what target, market, and acquirer characteristics influence book value multiples in 288 non-public bank acquisitions from 2001 Q3 to 2005 Q4. Multiples rise with acquirer size and capital ratios. Targets with high proportions of industry-adjusted core and large deposits have higher multiples. When using target variables relative to acquirers, multiples rise with higher proportions of core and large deposits, larger average bank size in the market, and relative growth in assets, loans, and deposits as well as market growth. In contrast to prior findings for public targets, acquirers do not pay premiums for target accounting performance.

In a survey of banks founded from 1994–2002, we find over 85% of respondents think their small-business market was underserved, 72% felt the market needed more competition, almost half indicated they were likely to start a bank because takeover activity displaced them, and 75% entered due to a market merger. Markets of banks started by displaced managers or following a merger have performance and lending characteristics similar to comparable banks, but larger changes in asset growth rates. Managers who responded that small-businesses were underserved have higher numbers and amounts of small-business loans 3 years after entry. Managers responding that entry was due to mergers eliminating community banks have lower ROA, but larger changes in market ROA. Markets had smaller changes in ROA when entry was to provide competition or when managers thought the small business market was underserved.

We study Internet-primary banks for differences in performance versus newly chartered traditional banks from 1996 through 2003. Internet-primary banks are larger, with lower net interest margins and loan losses, and higher wage and physical capital rates than newly chartered traditional banks. Univariate ROE is lower, but profit efficiency is significantly higher on average for Internet-primary banks compared to all newly chartered banks as well as those that survive through the sample period. In multivariate models, Internet-primary banks continue to have significantly higher average profit efficiency, and particularly so when of sufficient size.

Longstaff [Longstaff, F., 2000. The term structure of very short-term rates: new evidence for the expectations hypothesis. Journal of Financial Economics 58, 397–415] finds support for the expectations hypothesis at the very short end of the repurchase agreement (repo) term structure while other studies find calendar-time-based regularities cause rejection of the expectations hypothesis. Using Longstaff’s methods on a sample of repo rates that pre-dates Longstaff’s sample, we reject the expectations hypothesis for every maturity. The pre-Longstaff-sample repo data comes from a time period where the behavior of short-term interest rates is similar to the long-run average behavior of short-term interest rates. Our results imply that expectations hold when rates are less volatile and/or that we may be entering a period of lower volatility.

This study examines the motivation for using a reverse merger (RM) rather than an IPO to take a private firm public and analyzes the survival of RMs and IPOs in the aftermarket. Private firms using the RM technique are smaller, younger, and have poorer ex ante performance on average than those using IPOs. For private firms using RMs, 1.4% do not meet any listing requirements while all IPOs meet at least one requirement of the listing exchange. Forty-two percent of RMs are delisted compared with 27% of matched IPOs within 3 years of listing on an exchange.

We examine the link between volume and liquidity in money markets where there are close substitutes. We find that the size of the market, as a proxy for trading volume, affects yield spreads over T-bill rates. We examine the bankers acceptances market, when market size declined by half over the decade of the 1990s. Controlling for interest-rate levels, day-of-the-week, calendar term structure, credit spread, time-series, and cross-equation effects, we find that the substitution effect does not eliminate the impact of market-size changes on rates, but it does preserve the hierarchy of rates across instruments. Stocks and bonds have long duration, which leads to uncertainty about future prices should investors wish to liquidate, while the duration of money-market instruments is short and price variation is relatively small. Hence, the link between volume and liquidity may be very different for money-market securities compared to equities. In this paper, we empirically test the link between market size/volume and liquidity for money-market instruments. We determine if a decrease in the size of the market for Bankers Acceptances (BAs) from 1984 to 2000 led to an increase in the liquidity premium for BAs, which in turn changed the relative relation between BA rates and the rates on other money-market instruments. The ideal experimental setting to test for a direct link between low market size/volume and a high liquidity premium is one in which we can compare the returns from pairs of comparable securities with different volume. This experimental setting is difficult, if not impossible, to create in equities because of the difficulty in creating pairs of comparable securities. Money markets provide a better environment for testing the volume-liquidity conditions, because money-market securities are comparable, sharing the common characteristics of short-term maturity, low default risk, and high marketability. These common characteristics, coupled with an exogenous decline in BAs, provide an ideal experimental setting to investigate the interaction of volume and liquidity in short-term securities.

We investigate the efficacy of government guarantee programs for mortgage loans made on tribal lands by comparing lending outcomes for White applicants and Native Americans (NAs) living on- and off reservation lands. Simultaneous equations models with the loan-to-income ratio endogenous indicate both on- and off-reservation NA applicants experience higher conditional denial rates compared with otherwise similar White applicants. NAs living on-reservation are equally as likely to be approved for mortgage loans as off-reservation NAs. On-reservation applicants self-select lower loan-to-income ratios, and are held to a higher standard for this credit variable, likely because lower housing values and other economic variables challenge on-reservation applicants. Our findings suggest lack of financial resources, lack of applicant education about and experience with the mortgage process, low creditworthiness, and lender reluctance to confront burdensome bureaucracy limit on-reservation guarantee program success.

We examine hourly observations of one-month euro–dollar rates using the GARCH model from Baillie and Bollerslev (1990) and find an intraday volatility pattern with two important components. First, intraday volatility is largest during regular business hours in the Asian markets and smallest during regular business hours in the U.S. This result is in contrast to the previously identified intraday volatility patterns in the currency exchange rates. Second, we find volatility spikes at the beginning of the business day in Tokyo, London, and New York. Currency exchanges rates also show volatility spikes at the beginning of the business day in Tokyo, London, and New York. We interpret these results as support for the model by Hong and Wang (2000) which suggests that volatility clusters at the beginning and end of the regular business day, even in the absence of market closures, if most traders are not active during regular non-business hours.

We generalize traditional event-study techniques to allow for event-induced parameter shifts, shifting variances, and firm-specific event periods. Our method, which nests traditional methods, also permits systematic risk to change gradually during the event period and exit the period at higher or lower levels. We use our approach to study 123 banks that acquired other institutions between 1989 and 1995. We find a significant change in the systematic risk of the acquiring firms, significant ARCH effects, and an event period that ends before the date of the announcement. None of these results is detectable using conventional methods.

We analyze Fed funds rate changes in GARCH-in-mean (GARCH-M) models and find that daily rate change and variance patterns differ with the timing of the rate observation, but that all patterns are generally consistent with optimal reserve account management. We also find that Fed funds daily and intraday variances exhibit trends and persistence, and that daily variance effects differ when using marginal rates versus daily weighted average rates. Furthermore, we find that conditional variances do not provide information about daily or intraday rate changes. Our results provide support for the use of GARCH models for studies on other financial assets. JEL classification: G21, G28

The intraday literature suggests that returns, variances, and volume form an intraday reverse-J pattern. Two competing theories explain the observed patterns: private information about future security prices and trading stoppages. The Federal funds market allows a unique opportunity to study the causes of intraday patterns because private information common to most markets does not play a role in setting prices. We find reverse-J variance patterns while accounting for generalized autoregressive conditional heteroskedasticity (GARCH) model effects. Our results support trading stops as an explanation for the reverse-J pattern and suggest that private information is not a necessary condition for the observed pattern. Copyright 2001 by University of Chicago Press.

This paper studies stock price reaction to increased investment banking powers for commercial banks using Seemingly Unrelated Regressions. Market participants react favorably to the announcement of increased Section 20 powers to the Glass-Steagall Act both with and without a risk-shift variable. When the sample is split, abnormal returns are significantly higher for Money Center Banks, banks with prior Section 20 subsidiaries, and Large Regional commercial banks as compared to Small Regional banks. Cross sectional analysis suggests that banks with prior Section 20 subsidiaries have higher abnormal returns and Small Regional banks have lower abnormal returns than the average bank in the sample. Keywords: Glass-Steagall Act; Section 20 subsidiaries

We study the determinants of bank growth in a two-stage logistic regression model. We first compare banks that branch, Bank Acquire, or Product Expand with banks that do not grow externally. Banks that are federally chartered, in states with higher income growth, and with higher labor prices are less likely to grow externally. Larger banks are more likely to grow externally. In the second stage, we study determinants of growth activity for banks that expand products, branch, or acquire other banks. Depending on the time period, bank structure, regulatory environment, performance, and balance sheet characteristics determine bank growth choices.

Changes in bank market performance are compared for banks that choose not to grow, to branch, bank acquire, product expand, or some combination. Using the change in market value-to-book value ratios, banks that include acquiring other banks as part of their growth strategy have significant positive changes in performance. Positive performance by bank acquirers is in contrast to many studies, but prior research has not reviewed other growth activities in a single model, nor used market-based measures to review performance over longer time periods following bank expansion.

This study investigates the existence of psychological barriers in the Dow Jones Industrial Average, the S&P 500, and six foreign stock indices. It is believed by many in the investment community that index levels that are multiples of 100 serve as barriers, and that markets may resist crossing these barriers. Although return dynamics in the neighborhood of barrier points are not identical for all series studied, we find aberrations in the conditional means and variances consistent with psychological barriers. In five of the eight indices studied, conditional mean returns are significantly higher after crossing a barrier as part of an upward move, while only two series exhibit significant mean effects after crossing a barrier as part of a downward move. In seven of the eight series studied, we find significant conditional variance effects coincident with a barrier crossing. In addition, most series exhibit evidence of autoregressive conditional heteroskedastic (ARCH), generalized ARCH (GARCH), and leverage effects.

We investigate whether or not market discipline on banking firms changed after the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA) of 2010. If market discipline is improved, we should see a lower discount for size on yield spreads, particularly for larger banks. Using secondary market subordinated debt transactions we find that the DFA has been effective in reducing, but not in eliminating the too-big-to-fail (TBTF) effect on yield spreads. We find that the yield spread for the 19 TBTF banks increased by 155 basis points, but these banks still have yield spreads 61 basis points lower than a non-TBTF bank.

We examine the secondary market transactions of senior bonds issued by banks for the periods prior to and after passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA) in 2010. We find the 136 basis points discount on yield spreads because of the too-big-to-fail (TBTF) effects is removed after the DFA. Markets charge a premium of 33 basis points for the TBTF banks after the DFA. The premium increases further after the rating criteria changes by credit rating agencies. We find the default risk sensitivity of several variables improves and changes in risk are perceptible in the changes in yield spreads.

We investigate the effects of increased bond market transparency on the risk sensitivity of yield spreads for bank-issued subordinated notes and debentures after bond markets became more transparent in 2002. Models of yield spread levels and yield spread changes show improvement in normal economic times after markets became more transparent. Risk-sensitivity of yield spreads increases strongly prior to crises. We show that firm-specific default risk variables are significant determinants of yield spread changes around earnings announcements and we observe a stronger effect for lower rated bonds. Our results imply that market discipline poorly complements regulatory discipline during good economic times. In general, increased transparency improves risk sensitivity in all cases.

Determinants of yield spreads vary with market conditions and available information, which has implications for debt pricing models. After the bailout of Long Term Capital Management (LTCM) in September 1998, important firm-specific default risk measures, such as leverage, are not significant factors in determining yield spread levels of bank-issued subordinated notes and debentures (SND) because these measures do not reflect the true risk of the firm. Bond markets impound a higher cost for higher risk-taking, particularly for off-balance sheet risks, based on return-on-assets, after the LTCM bailout, Yield spreads have become less sensitive to firm-specific risks, even prior to the LTCM bailout, after the issuance of trust-preferred securities (TPS) by banks because TPS are junior claims to SND and provide an additional buffer to SND from default risk. Yield spreads on SND prior to TPS issuance by banks and the LTCM bailout are sensitive to conventional firm-specific risk measures. Yield spreads on TPS at the time of offer provide market signals about on-balance sheet risks.

Recently, there has been a marked increase in the number of banks choosing to operate as Subchapter-S Corporations. The apparent motivation is tax savings as Subchapter-S firms do not pay federal income taxes on income at the firm level, but transfer income to stockholders where it is taxed as individual income at personal tax rates. Given the apparent advantages of Sub-S status, there must be mitigating reasons for not choosing this organizational form. We empirically investigate factors affecting the choice of Subchapter-S status and key performance differences between Sub-S banks and those taxed as C-corporations. Empirical findings indicate that Sub-S banks are significantly smaller, pay higher dividends, have lower taxable income before Sub-S formation, higher profitability, lower capital and loan loss reserves, rely more on core deposits, and have higher agricultural but lower commercial and total loans. Sub-S banks are more likely to be rural and less likely to be de novo, or have publicly-traded stock.

To manage their reserve positions, depository institutions in the United States actively buy and sell deposits at the Federal Reserve Banks via the federal funds market. Beginning in 1991, the Eurodollar market also became an attractive venue for trading deposits at the Federal Reserve Banks. Prior to 1991, the Federal Reserve’s statutory reserve requirement on Eurocurrency liabilities of U.S. banking offices discouraged use of Eurocurrency liabilities as a vehicle for trading deposits at the Federal Reserve. This impediment was removed in December 1990. Beginning in January 1991, the overnight instruments in the federal funds market and in the Eurodollar markets, except for minor differences in risk, became similar vehicles for exchanging deposits at Federal Reserve Banks. Because the risk characteristics of the instruments differ, the law of one price need not hold precisely across the two markets. Yet, the authors hypothesize that, beginning in 1991, the two trading instruments became close enough substitutes that price pressures in one market began to show through to the other. Herein, the authors examine overnight LIBOR for U.S. bank settlement effects. During the period when the federal funds market and Eurodollar markets are similar venues for trading deposits at Federal Reserve Banks, they find strong settlement effects in overnight LIBOR. However, during the period when Eurocurrency liabilities carry a reserve tax, they find no evidence of a settlement effect in overnight LIBOR. Their results suggest that (i) the microstructure of the federal funds market spills over into the markets for substitute assets and (ii) Federal Reserve rules have implications beyond U.S. borders.

The authors generalize traditional event-study techniques to allow for event-induced parameter shifts, shifting variances, and firm-specific event periods. Their method, which nests traditional methods, also permits systematic risk to change gradually during the event period and exit the period at higher or lower levels. The authors use their approach to study 132 banks that acquired other institutions between 1989 and 1995. The authors find a significant change in the systematic risk of the acquiring firms, significant ARCH effects, and an event period that ends before the date of the announcement. None of these results is detectable using conventional methods. These results imply that (1) event studies that cannot account for information leakage may be biased, and (2) changes in systematic risk can occur in the absence of abnormal returns, and (3) regulators, investors and bank managers must evaluate each acquisition on its own merits; reliance on averages can mask important distinctions across acquisitions.

Black-owned and white-owned banks are studied to test for lending discrimination based on applicant's race. Using single-equation models the rndings suggest that black-owned banks may utilize applicant race in the mortgage granting decision. The result holds in a naive HMDA model and in an enhanced HMDA model with bank-specirc, demographic, and neighborhood characteristics added.

We use an E-GARCH model to estimate the wealth effects of Federal Reserve lending during the financial crisis to Investment banks (I-Banks), “Too Big to Fail” (TBTF) banks, and “traditional” commercial banks. Borrowing from the Term Auction Facility program has negative wealth effects for all banks and I-banks in particular. We also find that the market view of the liquidity programs changed across the sample sub-periods. I-Bank and TBTF bank borrowing from the discount window is initially viewed positively, however continued use of the discount window and the Term Auction Facility was generally (though not universally) viewed negatively. Commercial Paper Funding Facility program participation is consistently positive only for traditional banks and programs that focus on the purchase of specific securities (e.g., commercial paper) to address specific problems also appear to primarily benefit traditional banks. The inconsistency of results across the time periods of the crisis is telling as market participants struggled to discern what access to these programs meant.