Over the years, U.S. banks have increasingly relied on the bond market to finance their business. This created the potential for a link between the bond market and the corporate sector whereby borrowers, including those that do not rely on bond funding, became exposed to the conditions in the...

Theory suggests that banks' private information lets them hold up borrowers for higher interest rates. Since new information about a firm is revealed at the time of its bond IPO, it follows that banks will be forced to adjust their loan interest rates downwards after firms undertake their bond...

Modern corporate finance theory argues that although bank monitoring is beneficial to borrowers, it also allows banks banks to use the private information they gain through monitoring to quot;hold-upquot; borrowers for higher interest rates. In this paper, we seek empirical evidence for this...

This paper uses duration analysis to investigate the timing of firms' decision to first access the public bond market. We find that, consistent with Diamond's (1991) model, reputation has a non-monotonic effect on the timing of firms' first public bond issue: firms with the highest and lowest...