@article { , title = {Debt priority structure, market discipline, and bank conduct}, abstract = {© The Author 2017. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. We examine how debt priority structure affects bank funding costs and soundness. Leveraging an unexplored natural experiment that changes the priority of claims on banks’ assets, we document asymmetric effects that are consistent with changes in monitoring intensity by various creditors depending on whether creditors move up or down the priority ladder. The enactment of depositor preference laws that confer priority on depositors reduces deposit rates but increases nondeposit rates. Importantly, subordinating nondepositor claims reduces bank risk-taking, consistent with market discipline. This insight highlights a role for debt priority structure in the regulatory framework.}, doi = {10.1093/rfs/hhx111}, eissn = {1465-7368}, issn = {0893-9454}, issue = {11}, journal = {Review of Financial Studies}, note = {REF\_eligibility comment: This paper was accepted for publication on 31/08/2017. The AAM was deposited by the author, Enrico Onali, in the research repository of Aston University on 07/09/2017, i.e. within 3 months of the date of acceptance. Date of deposit obtained by contacting the Aston Open Access team directly as the date is not visible in the publicly-available record (http://publications.aston.ac.uk/31417/). [From Sarah Beach email of 16/10/18 10:14]}, pages = {4493-4555}, publicationstatus = {Published}, publisher = {Oxford University Press}, url = {https://nottingham-repository.worktribe.com/output/892574}, volume = {31}, keyword = {Banks, Depository Institutions, Micro Finance Institutions, Mortgages G28 - Government Policy and Regulation}, year = {2018}, author = {Danisewicz, Piotr and McGowan, Danny and Onali, Enrico and Schaeck, Klaus} }