The bail-in credibility: barking dogs seldom bite
This paper studies the senior unsecured bondholders’ bail-in expectations and market monitoring following bail-in legislative events aimed at introducing new tools for subordination. We measure bail-in expectations using a difference in differences approach that compares the reaction to bail-in even...
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| Veröffentlicht in: | Journal of banking regulation 2024-03, Vol.25 (1), p.1-19 |
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| container_title | Journal of banking regulation |
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| creator | Velliscig, Giulio Polato, Maurizio Floreani, Josanco Bolognesi, Enrica |
| description | This paper studies the senior unsecured bondholders’ bail-in expectations and market monitoring following bail-in legislative events aimed at introducing new tools for subordination. We measure bail-in expectations using a difference in differences approach that compares the reaction to bail-in events of senior unsecured bonds to the reaction of non-bailinable bonds. Similarly, we measure senior unsecured bondholders’ monitoring activity by using a triple differencing analysis that compares the yield-risk sensitivity reaction of senior unsecured bonds with respect to that of non-bailinable bonds. Our results indicate unaffected bail-in expectations by senior unsecured bondholders who, accordingly, do not enhance their pricing of banks’ risk. |
| doi_str_mv | 10.1057/s41261-022-00210-7 |
| format | Article |
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We measure bail-in expectations using a difference in differences approach that compares the reaction to bail-in events of senior unsecured bonds to the reaction of non-bailinable bonds. Similarly, we measure senior unsecured bondholders’ monitoring activity by using a triple differencing analysis that compares the yield-risk sensitivity reaction of senior unsecured bonds with respect to that of non-bailinable bonds. Our results indicate unaffected bail-in expectations by senior unsecured bondholders who, accordingly, do not enhance their pricing of banks’ risk.</abstract><cop>London</cop><pub>Palgrave Macmillan UK</pub><doi>10.1057/s41261-022-00210-7</doi><tpages>19</tpages><orcidid>https://orcid.org/0000-0001-9015-7957</orcidid></addata></record> |
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| language | eng |
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| source | SpringerLink Journals - AutoHoldings |
| subjects | Bailouts Bank failures Banking Banking industry Credibility Debt restructuring Economics and Finance Finance Financial Law/Fiscal Law Insolvency Original Article |
| title | The bail-in credibility: barking dogs seldom bite |
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