Brewer III, Elijah; Mondschean, Thomas H - In: Journal of Money, Credit and Banking 26 (1994) 1, pp. 146-64
This paper analyzes how financial markets reacted to S&L diversification into junk bonds. The authors report that junk bond holdings are positively correlated with both the volatility of S&L equity returns and the interest rates paid on large CDs. Next, they examine the impact of junk bonds on...