Akhigbe, Aigbe; Madura, Jeff; Martin, Anna D. - In: Journal of Financial Research 30 (2007) 1, pp. 147-162
Using a measure of default likelihood based on an option pricing method, we provide evidence that Fed policy actions affect the financial distress of commercial banks. When the Fed increases (decreases) interest rates, the measure of default likelihood increases (decreases). We show that when...