 Do bank bailouts have an impact on the underwriting business?Santiago Carbó-Valverde,
Pedro Cuadros-Solas () and
Francisco Rodríguez-Fernández
Journal of Financial Stability, 2020, vol. 49, issue C Abstract: We explore the effects of bank bailouts on competition in the underwriting business. We exploit a sample of underwriters active in the European corporate bond markets from 2006 to 2013 and find that reputable underwriters suffer market share losses (of 12.43 %) after being bailed out. However, the market share of non-reputable underwriters is found to increase after a bail out. An exploration of the firm–bank underwriting matching reveals that the probability of being chosen as underwriter in a given deal decreases for reputable bailed-out banks, while it increases for non-reputable bailed-out banks. These results provide evidence of the effects of bailouts on underwriting competition. The economic impact depends on the ex-ante reputational capital of the bailed-out bank. Keywords: Underwriters; Bailout; Reputation; Recapitalization (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finsta:v:49:y:2020:i:c:s1572308920300553 DOI: 10.1016/j.jfs.2020.100756 Access Statistics for this article Journal of Financial Stability is currently edited by I. Hasan, W. C. Hunter and G. G. Kaufman More articles in Journal of Financial Stability from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.