Three essays on bank credit investors and debt financing

Abstract

Bank debt financing is a key element of bank capital structure and, as such, has a vital relevance for bank activity and stability. The global financial crisis and the banking reforms following it have significantly affected bank funding structure and, as a result, its cost of debt. In this context, bank credit investors have become object of interest due to their increased exposure to losses (e.g., bail-in measures), especially across Euro area banks that are the major issuers of bank bonds.This dissertation aims at analysing bank credit investor responses and investment choices, focusing on key issues – such as regulatory reforms, market discipline, and investor protection policies – that banks have recently faced. As bank bonds become riskier, understanding the drivers and the effect of bond financing contributes towards advancing knowledge in the banking literature and provides meaningful implications for bank management and supervision..