presented in this paper shows that a loosening of US monetary policy leads to higher investment fund in ows to equities and debt … debt and equity issuance. The findings demonstrate the growing importance of non-bank financial intermediation over the …

Systemically important banks are subject to at least two departures from the neutrality of debt versus equity financing … underlying mechanisms differ. The tax shield incentivises debt financing as it reduces tax payments to the government. The … implicit funding subsidy incentivises debt financing as it lowers private bankruptcy costs. This funding subsidy is passed on …