Title: TARP's dividend skippers

Authors: Dobrina Georgieva; Linus Wilson

Addresses: Opus College of Business, University of St. Thomas, 2115 Summit Ave, MCH 316, Saint Paul, Minnesota 55403, USA ' Department of Economics & Finance, B. I. Moody III College of Business, University of Louisiana at Lafayette, 214 Hebrard Boulevard, Moody Hall 253, LA, USA

Abstract: Most of the banks receiving capital injections from the Troubled Asset Relief Program (TARP) issued preferred stock to taxpayers. This paper presents the factors that affect publicly traded banks' ability to pay the scheduled TARP preferred stock dividends. Smaller banks with weaker capital ratios and more problem loans are significantly more likely to suspend payments of their bailout dividends.

Keywords: bank bailout; banking industry; capital purchase programme; bailout dividends; Emergency Economic Stabilisation Act; hybrid securities; preferred stock; small business lending fund; trust preferred; TRUPS; TARP; Troubled Asset Relief Program; USA; United States; financial crisis.

DOI: 10.1504/IJFSM.2013.059605

International Journal of Financial Services Management, 2013 Vol.6 No.4, pp.293 - 308

Available online: 02 Mar 2014 *

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