A reconsideration of the risk sensitivity of U.S. banking organization subordinated debt spreads: a sample selection approach

The authors estimate a sample selection model over three distinct regulatory "regimes" when the treatment of bank bondholders (in the event of bank failures) differed substantially. They then estimate their selection model to test the strength of bond market discipline over these three regulatory regimes, finding that bank bond spreads are positively associated with bank risk measures during all three regimes, even during the too-big-to-fail period.

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Year of publication:	2004
Authors:	Covitz, Daniel M. ; Hancock, Diana ; Kwast, Myron L.
Published in:	Economic Policy Review. - Federal Reserve Bank of New York. - 2004, Sep, v.10 no.2, p. 73-92
Publisher:	Federal Reserve Bank of New York
Subject:	Bank assets \| Debt management \| Banks and banking - Ratio analysis \| Deposit insurance

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Extent:	application/pdf
Type of publication:	Article
Language:	English
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005372915