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An Analysis of European Banks' SND Issues and its Implications for the Design of a Mandatory Subordinated Debt Policy

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  • Andrea Sironi

Abstract

During the last twenty years an increasing number of proposals to improve bank market discipline through the introduction of a mandatory subordinated debt policy have been drafted and critically discussed by academic economists and bank regulators. While theoretical issues are key in this debate, a proper understanding of the market of banks' subordinated notes and debentures (SND) and of the securities main features is also considered as relevant for the potential introduction, design, and goals setting of such a policy. This paper builds on information concerning issuers, investors, markets, and securities technical features to critically discuss these aspects. Data on over 1,800 European banks' SND issues completed during the 1988-2000 period together with information on primary and secondary market functioning is presented.
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  • Andrea Sironi, 2001. "An Analysis of European Banks' SND Issues and its Implications for the Design of a Mandatory Subordinated Debt Policy," Journal of Financial Services Research, Springer;Western Finance Association, vol. 20(2), pages 233-266, October.
    • Handle: RePEc:kap:jfsres:v:20:y:2001:i:2:p:233-266
    DOI: 10.1023/A:1013110625995
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    References listed on IDEAS

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    1. Sironi, Andrea, 2003. "Testing for Market Discipline in the European Banking Industry: Evidence from Subordinated Debt Issues," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 35(3), pages 443-472, June.
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    3. Donald Morgan & Kevin Stiroh, 2001. "Market Discipline of Banks: The Asset Test," Journal of Financial Services Research, Springer;Western Finance Association, vol. 20(2), pages 195-208, October.
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    10. repec:aei:rpbook:53208 is not listed on IDEAS
    11. Treacy, William F. & Carey, Mark, 2000. "Credit risk rating systems at large US banks," Journal of Banking & Finance, Elsevier, vol. 24(1-2), pages 167-201, January.
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