TY  - UNPD
A1  - Hett, Florian
A1  - Schmidt, Alexander
T1  - Bank rescues and bailout expectations: the erosion of market discipline during the financial crisis : [version august 2013]
T2  - SAFE working paper series ; No. 36
N2  - We show that market discipline, defined as the extent to which firm specific risk characteristics are reflected in market prices, eroded during the recent financial crisis in 2008. We design a novel test of changes in market discipline based on the relation between firm specific risk characteristics and debt-to-equity hedge ratios. We find that market discipline already weakened after the rescue of Bear Stearns before disappearing almost entirely after the failure of Lehman Brothers. The effect is stronger for investment banks and large financial institutions, while there is no comparable effect for non-financial firms.
T3  - SAFE working paper - 36 
KW  - Bailout
KW  - Implicit Guarantees
KW  - Too-Big-To-Fail
KW  - Market Discipline
Y1  - 2013
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/33163
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-331634
UR  - http://ssrn.com/abstract=2365686
IS  - version august 2013
PB  - SAFE
CY  - Frankfurt am Main
ER  -