Fed Report Says TARP Banks Lend Less With More Risk

Law360, New York (March 7, 2012, 5:07 PM EST) -- Banks that received bailout funds through the U.S. government’s Troubled Asset Relief Program engaged in riskier lending and loaned out less money than banks that didn’t receive bailouts, according to a report by Federal Reserve analysts released Tuesday.

The report, which analyzed Fed lending data for U.S. banks between November 2007 and August 2010, found consistent evidence that the average risk rating of loan originations increased more at large banks — those with more than $10 billion in assets — that received TARP money than at...
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