In this paper we examine a novel two-stage mechanism for selling government securities, wherein the dealers underwrite in the first stage the sale of securities, which are auctioned in stage 2, via either a Discriminatory Auction (DA) or a Uniform Price Auction (UPA). Using proprietary data on...

This paper investigates, theoretically and empirically, the effects of liquidity regulation on the banking system. We document that the current quantity-based liquidity rule has reduced banks' liquidity risks. However, the mandated liquidity buffer appears to crowd out bank lending and lead to a...

When the bankruptcy code protects the creditors' rights with no impairments to secured creditors, issuance of debt with exemption from automatic stay adds no value. When the Code admits violations of absolute priority rules or results in collateral impairments to secured creditors, the liability...

In this paper, we develop a structural model that captures the interaction between the cash balance and investment opportunities for a rm that already has some debt outstanding. We consider a rm whose assets produce a stochastic cash flow stream. The fi rm has an opportunity to expand its...