Characteristics of Participants in the Commercial Paper Funding Facility

46 Pages Posted: 17 Aug 2011 Last revised: 28 Apr 2023

See all articles by Linus Wilson

Linus Wilson

University of Louisiana at Lafayette - College of Business Administration

Yan Wendy Wu

Wilfrid Laurier University

Date Written: April 28, 2023

Abstract

The Commercial Paper Funding Facility (CPFF) bought commercial paper from highly rated issuers of U.S. dollar commercial paper during the financial crisis of 2008 to 2009. This is the only study to analyze the accounting characteristics of both financial and non-financial firms participating and not participating in this $738 billion Federal Reserve program. In logistic regressions, CPFF participants and non-participants differed little solvency or liquidity ratios. Thus, there is little evidence of adverse selection by financial firms. Nevertheless, CPFF participants were significantly more likely to receive capital injections from the TARP bailout, to pose greater systemic risks, and be based in North America.

Keywords: ABCP, Asset Backed Commercial Paper, bailout, banks, Capital Purchase Program (CPP), commercial paper, Commercial Paper Funding Facility (CPFF), emergency lending, Federal Reserve, multinational firms, section 13(3), Troubled Asset Relief Program (TARP), U.S. Treasury, unsecured commercial paper

JEL Classification: G01, G18, G2, G28

Suggested Citation

Wilson, Linus and Wu, Yan Wendy, Characteristics of Participants in the Commercial Paper Funding Facility (April 28, 2023). Available at SSRN: https://ssrn.com/abstract=1911454 or http://dx.doi.org/10.2139/ssrn.1911454

Linus Wilson (Contact Author)

University of Louisiana at Lafayette - College of Business Administration ( email )

Department of Economics & Finance
214 Hebrard Blvd., Room 326
Lafayette, LA 70504-0200
United States
(337) 482-6209 (Phone)
(337) 482-6675 (Fax)

HOME PAGE: http://www.linuswilson.com

Yan Wendy Wu

Wilfrid Laurier University ( email )

75 University Ave W
Waterloo, Ontario N2L 3C5
Canada

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