U.S. banks that spent more money on lobbying were more likely to get government bailout money
, according to a study released on Monday.
Banks whose executives served on Federal Reserve boards were more likely to receive government bailout funds
from the Troubled Asset Relief Program, according to the study from Ran Duchin and Denis Sosyura, professors at the University of Michigan's Ross School of Business.
Banks with headquarters in the district of a U.S. House of Representatives member who serves on a committee or subcommittee relating to TARP also received more funds.
Political influence was most helpful for poorly performing banks
, the study found.
"Political connections play an important role in a firm's access to capital," Sosyura, a University of Michigan assistant professor of finance, said in a statement.
Banks with an executive who sat on the board of a Federal Reserve Bank were 31 percent more likely
to get bailouts through TARP's Capital Purchase Program, the study showed. Banks with ties to a finance committee member were 26 percent more likely
to get capital purchase program funds.
Scott Talbott, a senior vice president with industry lobbying group The Financial Services Roundtable, said the study was skewed because it did not exclude nine of the largest banks that were "strongly asked" by the government to take bailouts.
Those banks included Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co (JPM.N), and Morgan Stanley (MS.N) -- all of which repaid their bailouts in June.
Bank of America Co (BAC.N) and Citigroup Inc (C.N) more recently announced plans to pay back taxpayers.
Talbott also noted that $116 billion has been repaid with interest.
"This demonstrates the banks were excellent stewards of the taxpayer's money," Talbott said.
But a watchdog for the government's bailout, the special inspector general for TARP, said last month that the broader $700 billion bailout program "almost certainly" will result in an overall loss for taxpayers
President Obama said in October that despite the bailout, there was still too little credit flowing to small businesses