Bailed-out Banks Issued Riskier Loans

ANN ARBOR–(ENEWSPF)–January 16, 2014.  Banks that received federal bailout money approved riskier loans and shifted capital toward risky investments, according to a University of Michigan researcher.

In a study on risk-taking by banks that received funds from the Troubled Asset Relief Program, Denis Sosyura, assistant professor of finance at the Ross School of Business, found that the default risk rose 21 percent after the bailout compared to non-TARP banks.

Sosyura and colleague Ran Duchin of…