Market Discipline in Banking Reconsidered: The Roles of Deposit Insurance Reform, Funding Manager Decisions and Bond Market Liquidity

Topics:
Insurance
Tags:
Banking,
Bond,
Finance,
Insurance,
Investment,
Liquidity
Source:
The Federal Reserve Board

FREE Registration is required

Overview: This paper demonstrates that the risk sensitivity of a banking organization's subordinated debt yield spreads may understate the potential for market discipline in some periods and overstate in others because such spreads contain liquidity premiums that are driven, in part, by the risk-sensitivity of funding manager decisions. In addition, it is argued that mandating the regular issuance of subordinated debt would, by reducing the endogeneity of liquidity premiums, improve the information content of both primary and secondary market debt spreads, thereby augmenting both direct and indirect market discipline.

(Is this item miscategorized? Does it need more tags? Let us know.)

Format: PDF | Size: 678KB | Date: Jan 2002 | Pages: 36

Top results from Insurance

White Paper How Should Unemployment Benefits Respond to the Business Cycle?
White Paper Consolidation and Efficiency in the Financial Sector: A Review of the International Evidence
White Paper Deposit Insurance, Bank Incentives, and the Design of Regulatory Policy
White Paper Getting a Handle on Disability Claims
White Paper Deposit Insurance And Financial Development

» View all Insurance listings

advertisement
advertisement
  • Click Here
  • Click Here
  • Click Here
advertisement

Returning users: Log In Here!

Already registered on BNET, TechRepublic, or ZDNet? Simply log in.

Free Membership: Sign Up Now!

Sign up for a free membership today and get instant and unlimited access to one of the largest databases of white papers, webcasts, and casestudies anywhere. Your FREE membership allows you to:

  • Download an unlimited amount of content, including classic and current white papers, case studies, webcasts and more
  • Track content on your chosen topics of interest
  • Receive targeted email alerts when your favorite content is added
  • Save content for future reading
  • Receive our member newsletter

When you register to access this directory, you become a member of BNET. In addition, you allow us to share your information with companies that produce products or services featured in the library--so that such companies may contact you with information and offers regarding their products and services. This enables us to keep the library a free service. As a directory registrant, you will receive a complimentary subscription to the BNET member newsletter, The BNET Report. You can unsubscribe from this newsletter at any time. By clicking the Sign up button, you indicate that you agree to our Terms and Conditions and have read and understand our Privacy Policy (updated).