Moldogaziev, Tima T. - 2012
This paper provides an empirical test of the demand side of Thakor's (1982) theory of bond insurance signaling, namely … information in the market. We test the theory for a sample of bonds that covers before, during and immediately after the 2007 …-08 financial crisis. We find empirical evidence consistent with the theory that the bond insurance premium provides a signal to the …