منابع مشابه
Equity versus Bail-in Debt in Banking: An Agency Perspective∗
We examine the optimal size and composition of banks’ total loss absorbing capacity (TLAC). Optimal size is driven by the trade-off between providing liquidity services through deposits and minimizing deadweight default costs. Optimal composition (equity vs. bail-in debt) is driven by the relative importance of two incentive problems: risk shifting (mitigated by equity) and private benefit taki...
متن کاملAnalysis of proposals for a minimum subordinated debt requirement
Increasing market discipline has emerged as a major policy issue for banking regulators. The most prominent proposals for increasing market discipline would require banks to issue subordinated debt to the public. This paper explores the fundamental rationale behind mandatory subordinated debt proposals and their advantages and disadvantages. Our analysis indicates that a subordinated debt requi...
متن کاملCosts and benefits of mandatory subordinated debt regulation for banks
Proposals for regulation requiring that banks maintain some minimum level of subordinated debt have gained support recently. These proposals focus on the benefits of such regulation, specifically, that supervisors are expected to free ride on debtholders’ monitoring efforts. But there are also monitoring and other costs: there is no real free ride. This paper uses the theory of capital structur...
متن کاملThe disciplinary effect of subordinated debt on bank risk taking
Article history: Received 25 May 2012 Received in revised form 2 April 2013 Accepted 26 May 2013 Available online 5 June 2013 Using data for publicly listed commercial banks and bank holding companies around the world, I investigate the disciplinary effect of subordinated debt on bank risk taking in the period 2002– 2008. In addition, I examinewhether this effect depends on national bank regula...
متن کاملGetting the Most Out of a Mandatory Subordinated Debt Requirement
Recent advances in asset pricing|the reduced-form approach to pricing risky debt and derivatives|are used to quantitatively evaluate several proposals for mandatory bank issue of subordinated debt. We nd that credit spreads on both xed and oating rate subordinated debt provide relatively clean signals of bank risk and are not unduly in uenced by non-risk factors. Fixed rate debt with a put is u...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2017
ISSN: 1556-5068
DOI: 10.2139/ssrn.2902134