The subordinated debt alternative to Basel II

Journal of Financial Stability

Volumn 1, Issue 2, 2004, Pages 137-155

  Herring, Richard J ^a  

^a UNIVERSITY OF PENNSYLVANIA   (United States)

Author keywords

Accounting practices; Basel Accord; Capital

Indexed keywords

EID: 24144477465     PISSN: 15723089     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jfs.2004.09.001     Document Type: Article

References (47)

1. Altman, E.I., Saunders, A., 2002. The role of credit ratings in bank capital. In: Richard, M.L., Majnoni, G., Reinhart, C. (Eds.), Ratings, Raring Agencies and the Global Financial System. Kluwer Academic Publishers, pp. 99-116.
2. Bankers Roundtable, 1998. Market-based incentive regulation and supervision: a paradigm for the future. Washington, DC.
3. Basel Committee on Banking Supervision, 1988. International Convergence of Capital Measurement and Capital Standards. Basel Committee Publications No. 4, July.
4. Base Committee on Banking Supervision, 1996. Amendment to the Capital Accord to Incorporate Market Risks. Basel Committee Publications No. 24, January.
5. Benston, G., Eisenbeis, R.A., Horvitz, P.M., Kane, E., Kaufman, G., 1986. Perspectives on Safe and Sound Banking. MIT Press, Cambridge.
6. Benston, G.J., Kaufman, G.G., 1988-1991. Risk and Solvency Regulation of Depository Institutions: Past Policies and Current Options, Monograph Series in Finance and Economics. Salomon Center, Stern School of Business, New York University, Monograph.
7. Bliss, R.R., Flannery, M.J., 2002. Market discipline in the governance of U.S. bank holding companies: monitoring vs. influencing. Eur. Finance Rev., 6.
8. Board of Governors of the Federal Reserve System and United States Department of the Treasury, 2000. The Feasibility and Desirability of Mandatory Subordinated Debt, Report submitted to the Congress pursuant to section 108 of the Gramm-Leach-Bliley Act of 1999, December.
9. Brewer III, E., 1995. The impact of current deposit insurance on S&L shareholders' risk/return trade-offs. J. Financial Services Res. 9 (1), 65-69.
10. Calomiris, C.W., 1997. The Post-Modern Safety Net: Lessons from Developed and Developing Countries. American Enterprise Institute, Washington, DC.
11. Calomiris, C.W., Herring, R.J., 2002. The Regulation of Operational Risk in Investment Management Companies. Perspective, Investment Company Institute, September.
12. Carey, M., 2002. In: Richard, M.L., Majnoni, G., Reinhart, C. (Eds.), A Guide to Choosing Absolute Bank Capital Requirements. Kluwer Academic Publishers, pp. 116-138.
13. Collin-Dufresne, P., Goldstein, R.S., Martin, J.S., 2001. The determinants of credit spread changes. J. Finance 56 (6).
14. Cooper, K., Fraser, D.R., 1988. The rising cost of bank failures: a proposed solution. J. Retail Banking 10, 5-12.
15. Corvitz, D.M., Harrison, P., 2000. The Timing of Debt Issuance and Rating Migration: Theory and Evidence. Finance and Economics Discussion Series, 2000-10. Division of Research & Statistics and Monetary Affairs, Federal Reserve Board, January.
16. De Young, R., Flannery, M.J., Lang, W.W., Sorescu, S.M., 2001. The informational content of bank exam ratings and subordinated debt prices. J. Money Credit Banking 33, 900-925.
17. Diamond, D.W., Rajan, R.G., 2001. Liquidity Risk, liquidity creation, and financial fragility: a theory of banking. J. Political Economy 109 (2), 287-327.
18. Elton, E.J., Gruber, M.J., Agrawal, D., Mann, C., 2001. Explaining the rate spread on corporate bonds. J. Finance LVI(1), 247-277, February.
19. Evanoff, D.D., 1993. Preferred sources of market discipline. Yale J. Regulation 10, 347-367.
20. Evanoff, D.D., Wall, L.D., 2001. Sub-debt yield spreads as bank risk measures. J. Financial Services Res. 20 (2-3).
21. Flannery, M.J., 2001. The Faces of 'Market Discipline'. J. Financial Services Res. 20 (2-3).
22. Flannery, M.J., Sorescu, S.M., 1996. Evidence of bank market discipline in subordinated debenture yields: 1983-1991. J. Finance, 1347-1377.
23. Garber, P.M., 2000. Notes on market-based bank regulation. In: Joseph, R.B., Hunter, W.C., Kaufman, G.G. (Eds.), Global Financial Crises: Lessons from Recent Events. Kluwer Academic Publishers, pp. 255-259.
24. Guttentag, J.M., Herring, R.J., 1987. In: Proceedings of the Thirteenth Annual Conference. Restructuring Depository Institutions, working paper, Wharton School, reprinted in Competitive Markets and the Thrift Industry, San Francisco: Federal Home Loan Bank of San Francisco. December 10-11, 1987.
25. Hancock, D., Kwast, M., 2001. Using subordinated debt to monitor bank holding companies: is it feasible? J. Financial Services Res. 20 (2-3), 147-188.
26. Hassan, M.K., 1993. Capital market tests of risk exposure of loan sales activities of large U.S. commercial banks. Q. J. Business Economics, 27-49.
27. Hassan, M.K., Karels, G.V., Peterson, M.O., 1993. Off-balance sheet activities and bank default-risk premia: a comparison of risk measures. J. Economics Finance, 69-83.
28. Herring, R.J., 1999. Credit risk and financial instability. Oxford Rev. Economic Policy 15 (3), 63-79.
29. Herring, R.J., 2002. The Basel II approach to bank operational risk: regulation on the wrong track. J. Risk Finance 4(1), 42-45, Fall.
30. Herring, R.J., 2004. How can the invisible hand strengthen prudential supervision? In: Curt, H., Kaufman, G., Borio, C., Tsatsaronis, K. (Eds.), Market Discipline andBanking: Theory and Evidence. MIT Press, Cambridge.
31. Herring, R.J., Litan, R.E., 1995. Financial Regulation in the Global Economy. The Brookings Institution, Washington, DC.
32. Horvitz, P.M., 1986. Subordinated Debt Is Key to New Bank Capital Requirement. American Banker, December 31.
33. Jagtiani, J., Lemieux, C., 2001. Market discipline prior to bank failure. J. Economics Business 53, 313-324.
34. Jagtiani, J., Kaufman, G., Lemieux, C., 2002. The effect of credit risk on bank and bank holding company bond yields: evidence from the Post-FDICIA period. J. Financial Res. XXV (4), 559-575, Winter.
35. Lang, W. W., Robertson, D., 2000. Analysis of Proposals for a Minimum Subordinated Debt Requirement, Working Paper. Office of the Comptroller of the Currency, March.
36. Merton, R., 1974. On the pricing of risky debt: the risk structure of interest rates. J. Finance 29, 449-470.
37. Morgan, D., Stiroh, K., 1999. Bond Market Discipline of Banks: Is the Market Tough Enough? Staff Report 95. Federal Reserve Bank of New York, December.
38. Myers, S.C., Majluf, N.C., 1984. Corporate financing and investment decisions when firms have information that investors do not have. J. Financial Economics 13, 187-221.
39. Subgroup of the Shadow Financial Regulatory Committees of Europe, Japan and the United States, 1999. Improving the Basel Committee's New Capital Adequacy Framework, New York City, June 14.
40. Subgroup of the Shadow Financial Regulatory Committees of Europe, Japan, Latin America and the United States, 2001. Reforming Bank Capital Regulation. Amsterdam, June 18.
41. Taylor, C., 2002. A New Pre-Commitment Approach, An Alternative to Basel II. Center for the Study of Financial Innovation, New York.
42. U.S. Shadow Financial Regulatory Committee, 1999. The Basel Committee's New Capital Adequacy Framework, Statement No. 156, September.
43. U.S. Shadow Financial Regulatory Committee, 2000. Reforming Bank Capital Regulation, Statement No. 160, March.
44. U.S. Shadow Financial Regulatory Committee, 2001. The Basel Committee's Revised Capital Accord Proposal, Statement No. 169, February.
45. U.S. Shadow Financial Regulatory Committee, 2002. The Basel II Approach to Bank Operational Risk: Regulation on the Wrong Track, Statement No. 179, May.
46. Wall, L.D., 1989. A Plan for Reducing Future Deposit Insurance Losses: Puttable Subordinated Debt, Economic Review. Federal Reserve Bank of Atlanta, 2-17, July/August.
47. White, L., 2003. What Constitutes Appropriate Disclosure Policy for a Financial Conglomerate? Brookings Wharton Papers on Financial Services, Brookings Institution Press, 245-272.