Working Paper Series Subordinated Debt and Prompt Corrective Regulatory Action

  title={Working Paper Series Subordinated Debt and Prompt Corrective Regulatory Action},
  author={Douglas D. Evanoff and Larry Wall},
Several recent studies have recommended greater reliance on subordinated debt as a tool to discipline bank risk taking. Some of these proposals recommend using subordinated debt yield spreads as additional triggers for supervisory discipline under prompt corrective action (PCA), action that is currently prompted by capital adequacy measures. This paper provides a theoretical model describing how use of a second market-measure of bank risk, in addition to the supervisors’ own internalized… CONTINUE READING

From This Paper

Figures, tables, and topics from this paper.

Explore Further: Topics Discussed in This Paper


Publications referenced by this paper.

The dependent variable takes a value of 0 for CAMEL (or BOPEC) ratings 1 and 2, and a value of 1 for ratings 3 and higher

  • The results are from Evanoff, Wall
  • The PCA capital adequacy status ranges from 1 for…
  • 2001
Highly Influential
18 Excerpts

FIMS: A New Monitoring System for Banking Institutions.

  • R. A. Cole, J. W. Gunther
  • Federal Reserve Bulletin,
  • 1995
2 Excerpts

Similar Papers

Loading similar papers…