Banks’ structured bond financing: evidence from the European market

João Pinto; Mário Coutinho dos Santos

doi:10.26619/ERBE-2024.3.2.5

Banks’ structured bond financing: evidence from the European market

João Pinto
, Mário Coutinho dos Santos

Resultado de pesquisa › revisão de pares

Resumo

We examine the factors that influence European banks’ choice of issuing structured finance bond deals, in the form of securitization or covered bonds, vis-à-vis straight bond deals. Using a data set of 10,457 deals closed between 2000 and 2017, we find that banks may have used structured finance arrangements to manage credit risk and regulatory capital. Our results support the asymmetric information hypothesis that banks suffering from adverse selection problems choose structured finance over straight bond deals to overcome liquidity constrains and obtain longer maturity funding. Finally, we show that the choice between structured finance and straight bond finance affects not only banks’ capital ratios, but also their capital adequacy ratios.

Idioma original	English
Páginas (de-até)	91-122
Número de páginas	32
Revista	ERBE
Volume	3
Número de emissão	2
DOIs	https://doi.org/10.26619/ERBE-2024.3.2.5
Estado da publicação	Publicado - 15 jun. 2024

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Este resultado contribui para o(s) seguinte(s) Objetivo(s) de Desenvolvimento Sustentável

ODS 9 Indústria, inovação e infraestrutura

Acesso ao documento

10.26619/ERBE-2024.3.2.5Licença:

119686978Final published version, 2,12 MBLicença:

http://hdl.handle.net/10400.14/57094Licença:

CEGE: Research Center in Management and Economics
Silva, M. (Professor Catedrático), Sousa, R. (Professor Catedrático), Alves, P. (Professor Auxiliar), Madsen, A. (Professor Auxiliar Convidado), Lourenço, A. (Professor Associado), Carvalho, A. S. (Professor Associado), Andrade, A. (Professor Auxiliar), Silva, P. D. (Professor Associado), Vlačić, B. (Professor Auxiliar Convidado), Martins, C. (Professor Auxiliar Convidado), Gomes, C. (Investigador Auxiliar), Gevrek, Z. E. (Professor Auxiliar Convidado), Oliveira, F. G. D. (Professor Associado), Faria, G. (Professor Associado Convidado), Marreiros, H. (Bolseiro), Pinho, J. (Professor Auxiliar Convidado), Machado, J. (Professor Associado), Araújo, J. (Investigador Auxiliar), Pinto, J. (Professor Auxiliar), Rego, A. (Professor Catedrático), Gaspar, J. M. (Investigador Auxiliar), Corbo, L. (Professor Auxiliar Convidado), Costa, L. (Professor Associado), Fernandes, L. (Professor Auxiliar), Sottomayor, M. (Professor Auxiliar), Martins, N. (Professor Catedrático), Hernández-Marrero, P. (Investigador Auxiliar), Gonçalves, R. (Professor Associado), Ribeiro, R. (PI), Coelho, S. L. (Docente Assistente), Pereira, S. M. (Investigador Auxiliar), Silva, S. (Professor Associado), Rodrigues, V. (Professor Associado), Sotiros, D. G. (Investigador Auxiliar), Valverde, C. (Professor Auxiliar), Leitão, A. (Professor Auxiliar), Julião, J. (Professor Auxiliar), Tavares, M. (Professor Auxiliar), Lages, C. R. (Investigador Auxiliar), Elmashhara, M. G. (Investigador Auxiliar) & Teymourifar, A. (Investigador Auxiliar)
1/01/20 → 31/12/25
Projeto

Citação

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title = "Banks{\textquoteright} structured bond financing: evidence from the European market",

abstract = "We examine the factors that influence European banks{\textquoteright} choice of issuing structured finance bond deals, in the form of securitization or covered bonds, vis-{\`a}-vis straight bond deals. Using a data set of 10,457 deals closed between 2000 and 2017, we find that banks may have used structured finance arrangements to manage credit risk and regulatory capital. Our results support the asymmetric information hypothesis that banks suffering from adverse selection problems choose structured finance over straight bond deals to overcome liquidity constrains and obtain longer maturity funding. Finally, we show that the choice between structured finance and straight bond finance affects not only banks{\textquoteright} capital ratios, but also their capital adequacy ratios.",

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author = "Jo{\~a}o Pinto and Santos, \{M{\'a}rio Coutinho dos\}",

year = "2024",

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AU - Santos, Mário Coutinho dos

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N2 - We examine the factors that influence European banks’ choice of issuing structured finance bond deals, in the form of securitization or covered bonds, vis-à-vis straight bond deals. Using a data set of 10,457 deals closed between 2000 and 2017, we find that banks may have used structured finance arrangements to manage credit risk and regulatory capital. Our results support the asymmetric information hypothesis that banks suffering from adverse selection problems choose structured finance over straight bond deals to overcome liquidity constrains and obtain longer maturity funding. Finally, we show that the choice between structured finance and straight bond finance affects not only banks’ capital ratios, but also their capital adequacy ratios.

AB - We examine the factors that influence European banks’ choice of issuing structured finance bond deals, in the form of securitization or covered bonds, vis-à-vis straight bond deals. Using a data set of 10,457 deals closed between 2000 and 2017, we find that banks may have used structured finance arrangements to manage credit risk and regulatory capital. Our results support the asymmetric information hypothesis that banks suffering from adverse selection problems choose structured finance over straight bond deals to overcome liquidity constrains and obtain longer maturity funding. Finally, we show that the choice between structured finance and straight bond finance affects not only banks’ capital ratios, but also their capital adequacy ratios.

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KW - Capital structure

KW - Debt choice

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KW - Covered bonds

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Banks’ structured bond financing: evidence from the European market

Resumo

ODS da ONU

Acesso ao documento

Impressão digital

Projetos

CEGE: Research Center in Management and Economics

Citação