Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5091634 | Journal of Banking & Finance | 2006 | 25 Pages |
Abstract
The 1993 Japanese financial system reform allowed banks to enter the underwriting market for corporate bonds through bank-owned security subsidiaries. This paper examines empirically whether underwriting commissions and yield spreads on corporate straight bonds issued domestically fell as a result of this bank entry. The empirical results show that bank entry significantly lowers both underwriting commissions and yield spreads. Commissions charged by banks are significantly lower than those charged by investment houses. Lending and shareholding relationships between the issuer and underwriter are not important in determining commissions or yield spreads.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Sumiko Takaoka, C.R. McKenzie,