Title: Racial discrimination in TARP investments

Authors: Lucas Puente; Linus Wilson

Addresses: Department of Political Science, Stanford University, Stanford, CA 94305, USA ' Department of Economics and Finance, B.I. Moody III College of Business, University of Louisiana, 214 Hebrard Boulevard, Moody Hall 253, P.O. Box 44570, Lafayette, LA 70504-4570, USA

Abstract: Minority and black owned banks were significantly less likely to receive funds from the Troubled Asset Relief Program (TARP) Community Development Capital Initiative (CDCI). A non-minority bank with the median characteristics was approximately ten times more likely to obtain TARP funds than an African-American owned bank after controlling for other factors. We also find prior TARP recipients and banks with fewer troubled assets were more likely to obtain money from this program.

Keywords: bailout; CDCI; CDFI; discrimination; ethics; race; racial discrimination; TARP.

DOI: 10.1504/IJFERM.2019.096634

International Journal of Financial Engineering and Risk Management, 2019 Vol.3 No.1, pp.32 - 46

Received: 26 Aug 2017
Accepted: 14 Sep 2017

Published online: 30 Oct 2018 *

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