 Bond Allocation After Bank Resolution CasesAngela Maddaloni and
Giulia Scardozzi ()
Chapter Chapter 4 in The New Bail-In Legislation, 2022, pp 49-62 from Palgrave Macmillan Abstract: Abstract Investors may not react to the approval of the regulation (as analyzed by the previous chapter) and may not realize the inherent risk in certain instruments (e.g. bail-inable bonds) until banks are actually experiencing distress. In 2017, several distressed banks that had issued bail-inable debt were actually resolved. Case studies of the major resolution events are discussed in this chapter (e.g. Banco Popular, the Italian “Venetian Banks,” and Monte dei Paschi di Siena). Evidence is provided on the implications of the implementation of the bail-in; results suggest that the banking sector in aggregate increased the nominal amount held of bail-inable bonds issued by riskier banks relative to safer banks (possibly impairing financial stability by increasing the risk of contagion in case of a bank failure), whereas other financial institutions decreased their holdings. Keywords: Bond holdings; Bank distress; Banco Popular; Banche Venete; Monte dei Paschi di Siena (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-030-87560-2_4 Ordering information: This item can be ordered from DOI: 10.1007/978-3-030-87560-2_4 Access Statistics for this chapter More chapters in Palgrave Macmillan Studies in Banking and Financial Institutions from Palgrave Macmillan |
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