This paper investigates if the bond market disciplines all banks equally, in the sense of demanding the same relative risk premium across banks of different risk over the business cycle. To test this hypothesis, the paper compares the difference between the credit spreads in the primary market...

This paper empirically explores the monitoring behavior of banks. We are able to infer bank monitoring activity by observing changes in internally-generated risk metrics for corporate credits. We use these measures of monitoring activity to better understand the bank monitoring motives and...