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Analysis Of Government Stimulus During Covid-19 And The Bank Distress Of 2023, Kara Hagler
Analysis Of Government Stimulus During Covid-19 And The Bank Distress Of 2023, Kara Hagler
CMC Senior Theses
Due to the hardships that small businesses were facing from the onset of COVID-19 in March 2020, the government created the Payment Protection Program (PPP). This program used banks as the initial lenders for small business loans to facilitate loans from the government to small businesses. In this article, I study how participation in the PPP lending program contributes to the Bank Distress of 2023 by using a bank-level quarterly panel data set from 2019-2023. Estimation of difference-in-difference specifications reveals banks that opted into the PPP program experienced an increase in held-to-maturity securities relative to non PPP banks. The mechanism …