Bank Bond Holdings and Bail-in Regulatory Changes: Evidence from Euro Area Security Registers

Carlo Altavilla, Cecilia Melo Fernandes, Steven Ongena and Alessandro Scopelliti
Additional contact information
Cecilia Melo Fernandes: International Monetary Fund (IMF)

No 25-38, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: We assess how regulatory changes in bail-inable liability requirements, aimed at ensuring orderly resolution processes and minimizing taxpayer-funded bailouts, affect bank bond holdings. Using confidential data on banks' securities portfolios, we find that the introduction of the Minimum Requirements for Eligible Liabilities prompts banks to increase their holdings of eligible bank bonds issued by other banks, compared to non-eligible bonds. Similarly, the Total Loss-Absorbency Capacity requirements encourage banks to invest in eligible subordinated debt issued by global systemically important banks. Our findings also reveal a within-country concentration of bank bond holdings, which may pose challenges to effective bail-in implementation.

Keywords: bank bonds; regulatory changes; bail-inable debt; MREL; TLAC (search for similar items in EconPapers)
JEL-codes: G01 G21 G28 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2025-04
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mon and nep-reg
References: Add references at CitEc
Citations:

Downloads: (external link)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5203867 (application/pdf)

Related works:
Working Paper: Bank bond holdings and bail-in regulatory changes: evidence from euro area security registers (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2538

Access Statistics for this paper

More papers in Swiss Finance Institute Research Paper Series from Swiss Finance Institute Contact information at EDIRC.
Bibliographic data for series maintained by Ridima Mittal ().