Journal of Financial Risk Management
Volume 2, Issue 2 (June 2013)
ISSN Print: 2167-9533 ISSN Online: 2167-9541
Google-based Impact Factor: 1.09 Citations
Market Discipline of Subordinated Debt: Empirical Evidence from Japanese Commercial Banks ()
Affiliation(s)
ABSTRACT
We investigate if Subordinated Note and Debenture (SND) holders make banks to take less risk by analyzing balance sheet data of Japanese commercial banks. The cross-section regression shows that banks take less risk as the amount of SNDs increase. Specifically, it is shown that the loan risk measure (the ratio of impaired loans to the total loans) and the stock investment risk measure (the invested stocks over bank capital) have decreased with the increase of SND amounts. These results provide evidence that SNDs are effective instrument for the market discipline.
KEYWORDS
Share and Cite:
Cited by
Copyright © 2024 by authors and Scientific Research Publishing Inc.
This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.