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The Resilience of the U.S. Corporate Bond Market during Financial Crises

Author

Listed:
  • Bo Becker

    (Stockholm School of Economics, CEPR, ECGI)

  • Efraim Benmelech

    (Northwestern University Kellogg School of Management, NBER)

Abstract

Corporate bond markets proved remarkably resilient against a sharp contraction caused by the 2020 COVID-19 pandemic. We document three important findings: (i) bond issuance increased immediately when the contraction hit, whereas, in contrast, syndicated loan issuance was low; (ii) Federal Reserve interventions increased bond issuance, while loan issuance also increased, but to a lesser degree; and (iii) bond issuance was concentrated in the investment-grade segment for large and profitable issuers. We compare these results to previous crises and recessions and document similar patterns. We conclude that the U.S. bond market is an important and resilient source of funding for corporations.

Suggested Citation

  • Bo Becker & Efraim Benmelech, 2025. "The Resilience of the U.S. Corporate Bond Market during Financial Crises," International Journal of Central Banking, International Journal of Central Banking, vol. 21(4), pages 405-463, October.
    • Handle: RePEc:ijc:ijcjou:y:2025:q:4:a:7
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