The "shocker" of the decade

Banks and Bailouts: Playing Politics?

12/21/2009 --

Ross professors say banks with strong political ties were more likely to get government bailout funds.

ANN ARBOR, Mich. — Banks with strong political connections were more likely to receive bailout money from the government — and more of it — in the past year than those with weaker ties, say Ross researchers.

A new study by Ross professors Ran Duchin and Denis Sosyura found that banks with connections to members of congressional finance committees and banks whose executives served on Federal Reserve boards were more likely to receive funds from the Troubled Asset Relief Program, the federal government's program to purchase assets and equity from financial institutions to strengthen its financial sector.

more