This paper demonstrates that subordinated debt (subdebt thereafter) regulation can be an effective mechanism for disciplining banks. By reducing the chance that managers of distressed banks can take valueヾestroying actions to benefit themselves, subdebt regulation may encourage banks to lower asset ris...
Holders of bank subordinated debt, as they buy and sell bank debt securities in the secondary market and negotiate purchases in the primary market, will also signal to federal regulators the private sector's view as to the value of a bank's enterprise.Mark E Van Der...
One means recommended to accomplish this is to increase the role of subordinated debt in the bank capital requirement. Arguments have been made that this could lead to improvements in both market and supervisory discipline. Although a number of such proposals have been made, there appears to be ...
aA bank's subordinated debt and stock can be used to determine whether banking risk has changed because the efficient market hypothesis suggests that traded subordinated debt and common stock are continuously and fairly priced with respect to their funda-mental values. Moreover, any new information ...
A bank's subordinated debt and stock can be used to determine whether banking risk has changed because the efficient market hypothesis suggests that traded subordinated debt and common stock are continuously and fairly priced with respect to their funda-mental values. Moreover, any new information ...
It has been proposed,that bank subordinated debt yields be used as a signaling device to reflect a bank's condition. Of particular interest to those charged with the bank safety net is a reduction in the recognition lag of bank distress in order to promote self-correction by the bank or fo...
show that a mandatory subordinated debt policy (MSDP) can be used together with the contingent purchase and assumption policy to further reduce the probability of future bank failure provided that a high level of uninsured debt can improve the effectiveness of monitoring by subordinated debt holders....
Subordinated Debt: A Capital Markets Approach to Bank Regulation Article proposes that large banks should be required to issue a minimum amount of long-term subordinated debt to third-party investors and sets forth a comprehensive subordinated debt program as a complement to government regulation of ...
53.12% stake in WLB from the Selling Shareholders for a total cash consideration of HK$19.3 billion (RMB 17.2 billion), or HK$156.5 per share (the "Acquisition"). Based upon WLB’s audited 2007 financial results, the purchase price implies a valuation of approximately 2.91 times book value....
show that a mandatory subordinated debt policy (MSDP) can be used together with the contingent purchase and assumption policy to further reduce the probability of future bank failure provided that a high level of uninsured debt can improve the effectiveness of monitoring by subordinated debt holders....