@techreport{NBERw15458, title = "Paulson's Gift", author = "Pietro Veronesi and Luigi Zingales", institution = "National Bureau of Economic Research", type = "Working Paper", series = "Working Paper Series", number = "15458", year = "2009", month = "October", doi = {10.3386/w15458}, URL = "http://www.nber.org/papers/w15458", abstract = {We calculate the costs and benefits of the largest ever U.S. Government intervention in the financial sector announced the 2008 Columbus-day weekend. We estimate that this intervention increased the value of banks’ financial claims by $131 billion at a taxpayers’ cost of $25 -$47 billions with a net benefit between $84bn and $107bn. By looking at the limited cross section we infer that this net benefit arises from a reduction in the probability of bankruptcy, which we estimate would destroy 22% of the enterprise value. The big winners of the plan were the three former investment banks and Citigroup, while the loser was JP Morgan.}, }