Starting on December 18, 2008 the Federal Reserve began paying 25 basis points (bps) on the reserves of depository institutions. Theory argues that the rate paid on reserves establishes a floor for the federal funds market. Nonetheless, the effective federal funds rate has stayed well below this...

Starting on December 18, 2008 the Federal Reserve began paying 25 basis points (bps) on the reserves of depository institutions. Theory argues that the rate paid on reserves establishes a floor for the federal funds market. Nonetheless, the effective federal funds rate has stayed well below this...

We investigate the effects of increased bond market transparency on the risk sensitivity of yield spreads for bank-issued subordinated notes and debentures after bond markets became more transparent in 2002. Models of yield spread levels and yield spread changes show improvement in normal...

We examine the secondary market transactions of senior bonds issued by banks for the periods prior to and after passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA) in 2010. We find the 136 basis points discount on yield spreads because of the too-big-to-fail (TBTF)...