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| Main Author: | |
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| Format: | Preprint |
| Published: |
2025
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| Subjects: | |
| Online Access: | https://arxiv.org/abs/2509.03086 |
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| _version_ | 1866914172171714560 |
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| author | Lukyanov, Georgy |
| author_facet | Lukyanov, Georgy |
| contents | I develop a tractable adverse-selection model comparing secured bank loans and bonds when both pledge collateral but differ in effective liquidation efficiency. A small wedge in recovery rates generates coexistence, a sharp bank-bond cutoff, and distinctive comparative statics in issuance, pricing, collateral, and default. Changes in insolvency regimes or creditor coordination shift the composition of external finance and welfare, with clear implications for bank-based versus market-based intermediation and financial stability. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2509_03086 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Liquidation Efficiency and the Bank-Bond Margin Lukyanov, Georgy Theoretical Economics I develop a tractable adverse-selection model comparing secured bank loans and bonds when both pledge collateral but differ in effective liquidation efficiency. A small wedge in recovery rates generates coexistence, a sharp bank-bond cutoff, and distinctive comparative statics in issuance, pricing, collateral, and default. Changes in insolvency regimes or creditor coordination shift the composition of external finance and welfare, with clear implications for bank-based versus market-based intermediation and financial stability. |
| title | Liquidation Efficiency and the Bank-Bond Margin |
| topic | Theoretical Economics |
| url | https://arxiv.org/abs/2509.03086 |