We empirically investigate the effect of the Capital Purchase Program under the Troubled Asset Relief Program (TARP) on the transparency of participating banks by examining changes in their loan loss provisions. We demonstrate that TARP banks reduced transparency to a greater extent than non-TARP banks did by recognizing smaller and less timely loan loss provisions for changes in nonperforming loans and increasing discretionary loan loss provisions more after receiving TARP funds. While the reduced timeliness was mainly observed in large TARP banks and banks with low tier 1 capital or high earnings, small TARP banks and banks with low earnings significantly increased their discretionary provisions. In addition, the decreased timeliness and increased discretionary provisions were mainly driven by TARP banks that did not repay their funds. TARP banks’ reduced transparency, which inhibits the accurate assessment of bank risk by outsiders, is consistent with moral hazard in disclosing their financial reporting information.

我们通过检查不良贷款准备金的变化，从经验上调查了问题资产救助计划（TARP）下的资本购买计划对参与银行透明度的影响。我们证明，与非TARP银行相比，TARP银行通过在识别TARP资金后认识到较小和较不及时的不良贷款变化的贷款损失准备金以及更多地增加了可自由支配的贷款损失准备金，从而大大降低了透明度。虽然及时性下降主要出现在大型TARP银行和低一级资本或高收益银行中，但小型TARP银行和低收益银行显着增加了其酌处准备金。此外，及时性下降和酌处准备金增加主要是由于TARP银行没有偿还资金。