Financial Markets, Institutions and Instruments bridges the gap between the academic and professional finance communities. With contributions from leading academics, as well as practitioners from organizations such as the SEC and the Federal Reserve, the journal is equally relevant to both groups. Each issue is devoted to a single topic, which is examined in depth, and a special fifth issue is published annually highlighting the most significant developments in money and banking, derivative securities, corporate finance, and fixed-income securities.

Financial Markets, Institutions and Instruments aims to bridge the gap between the academic and professional finance communities. The journal features contributions from leading academics as well as practitioners from organizations such as the SEC and the Federal Reserve, making it relevant to both groups. Each issue focuses on a specific topic, examined in depth, and an annual special fifth issue highlights significant developments in money and banking, derivative securities, corporate finance, and fixed-income securities.

《金融市场、机构与工具》旨在弥合学术界与专业金融界之间的差距。该期刊汇集了来自顶尖学者和来自美国证券交易委员会（SEC）及联邦储备系统等机构的从业者的贡献，因而对这两个群体都具有重要意义。每期专注于一个特定主题，进行深入探讨，并且每年出版一份特别的第五期，重点介绍货币与银行、衍生证券、公司金融和固定收益证券等领域的重大进展。

Financial Markets, Institutions and Instruments

Abstract Do banks price the risk of stranded fossil fuel reserves? To address this question, we hand collect global data on corporate fossil fuel reserves from 2002 to 2016, match it with syndicated loans, and subsequently compare the loan rate charged to fossil fuel firms — along their climate policy exposure — to other firms. We find that banks price climate policy exposure, especially after 2015. We also uncover that our main effect further increases for loans with longer maturity, that loan size to fossil fuel firms increases, and that ‛Green’ banks also charge higher loan rates to fossil fuel firms.

Manthos D Delis

Kathrin De Greiff

Maria Iosifidi

Steven Ongena

Financial Markets Institutions and Instruments

Being stranded with fossil fuel reserves? Climate policy risk and the pricing of bank loans

被困于化石燃料储备？气候政策风险与银行贷款定价

Abstract Wealth inequality around the world is high and rising. In this paper, we argue that wealth inequality in the United States has been exacerbated by an environment favourable to the ultra‐wealthy. Three distinctive changes in the economic and political landscape have fostered the increase in inequality. First, campaign finance law abruptly changed after the Citizens United Supreme Court decision. This decision gave the ultra‐wealthy an outsized influence on American politics. Second, an increase in competition for executive talent drove CEO salaries to new heights. Demand increased for executives with general leadership skills as corporations grew larger, increasing competition in the market for executive talent. Third, because tax policy in the United States is subject to lobbying influences, those at the top of the wealth distribution are favoured, leading to further concentration in wealth. Our empirical results are consistent with the view that these changes resulted in an increase in disparity, shifting wealth from the 99% to the 1%.

Lucy F. Ackert

Gabriel G. Ramirez

The political and economic environment promoting growth in American wealth inequality

促进美国财富不平等增长的政治和经济环境

Abstract We show that high yield (HY) mutual funds own and trade ETFs to manage liquidity needs driven by fund flows, whereas investment grade (IG) funds do not. The use of ETFs by HY mutual funds to manage liquidity shifts some trading away from bonds and into ETFs, which reduces the liquidity of the underlying bonds. This substitution effect outweighs the better‐understood inclusion effect, whereby bond liquidity benefits from increased ETF ownership, such that the net effect of ETFs is to reduce HY liquidity. In IG, the substitution effect is not significant and ETFs result in increased bond liquidity.

Jeffrey Meli

Zornitsa Todorova

Credit ETFs in Mutual Funds and Corporate Bond Liquidity

共同基金中的信用交易所交易基金与公司债券流动性

Abstract In this paper, we empirically investigate the impact of intensified competition on rating quality in the credit rating market for residential mortgage‐backed securities (RMBS) in the period 2017–2020. We provide evidence that competition between large credit rating agencies (CRAs) (Moody's and Standard &amp; Poor's) and newer smaller ones (Dominion Bond Rating Service Morningstar and Kroll Bond Rating Agency) creates credit rating inconsistencies in the RMBS market. While a credit rating should solely represent the underlying credit risk of a RMBS, irrespective of the competition in the market, our results show that this is not the case. When competitive pressure is higher, both large and small CRAs tend to adjust their rating standards (smaller CRAs react to large CRAs and vice versa).

Vivian M. van Breemen

Frank J. Fabozzi

Dennis Vink

Intensified Competition and The Impact on Credit Ratings in the RMBS market

加剧的竞争及其对RMBS市场信用评级的影响

Abstract We design a novel across‐the‐curve credit spread index, AXI, a measure of the recent cost of wholesale unsecured debt funding for publicly listed US bank holding companies and commercial banks. AXI, a benchmark for bank lending and risk management, is the weighted average of credit spreads for unsecured debt instruments with maturities ranging from overnight to five years, with weights that reflect both transaction and issuance volumes. We provide illustrative output of the bond‐based component of AXI. By widening coverage to include all corporate debt issuers, we also build a financial conditions index (FXI).

Antje Berndt

Darrell Duffie

Yichao Zhu

Across‐the‐Curve Credit Spread Indices

跨曲线信用利差指数

Abstract Extant studies on political connections document both benefits and costs for firms. In this study, we investigate whether politically connected firms pay higher taxes than their non‐connected counterparts and thus facilitate politicians to receive political benefits. Using the presidential election in Indonesia as an exogenous event, and analysing a sample of Indonesian listed firms over the period 2007–2016, we show that politicians extract resources from firms to realise their political objectives, for example, increasing tax revenues and gaining votes. We also find that politicians pursue more rent‐seeking among firms with transactional political connections. In return for over‐payment of corporate taxes, these connected firms enjoy lower cost of borrowing and higher firm value after the election year. These results are robust to the use of different regression techniques (i.e., pooled ordinary least square and probit) and tests (i.e., endogeneity, parallel trend assumption and placebo), and support the grabbing hand hypothesis of political connections. Our study contributes to the scarce literature showing that politically connected firms help politicians by providing higher tax revenues and experience a lower cost of debt and higher firm value in exchange for providing this favour to politicians.

Taufiq Arifin

Rezaul Kabir

Does it cost to be politically connected? An examination of the grabbing hand hypothesis using corporate taxes

政治关联是否代价高昂？利用企业税收对掠夺之手假说的检验

Abstract Using insights from the social network theory which posits that individuals with high network centrality have influence and power within their social networks, we argue that CEO network centrality increases the CEO bargaining power in audit fee negotiations. We find that audit fees are lower in firms managed by CEOs with high network centrality. We also find that high‐centrality CEOs do not negotiate audit fees at the expense of lower‐quality audit services. We further document the influence high‐centrality CEOs have on the audit decisions of their social peers within the network. For example, we show that less central (i.e., peripheral) CEOs are likely to hire auditors that do work for firms with CEOs enjoying high levels of network centrality. Together our findings suggest that high network centrality reflects a bargaining power CEOs can use to lower their audit fees.

Mohamad Mazboudi

Salim Chahine

Yiwei Fang

Mingying Cheng

Do high‐centrality CEOs influence audit outcomes?

高中心性CEO是否影响审计结果？

Abstract We investigate how small and large banks behave when they face liquidity shortages. Our findings reveal that only small banks increase their capital ratios during episodes of liquidity shortages. They do so by downsizing but also by holding less risky assets and by reducing their lending. Furthermore, the increase in capital ratios is higher for small banks which are more reliant on market liquidity and small banks operating below their target capital ratio. On the whole, our findings show that small banks operate prudently whereas large banks are less concerned. Our work has strong implications for bank regulation and supervision.

Thierno Amadou Barry

Alassane Diabaté

Amine Tarazi

Do banks adjust their capital when they face liquidity shortages? Evidence from U.S. commercial banks

银行在面临流动性短缺时是否会调整其资本？来自美国商业银行的证据

Abstract We study profit and cost efficiency effects of the Paycheck Protection Program (PPP) for US banks that disbursed the funds. Using bank‐level data combined with PPP bailout data and instrumental variables and other techniques for identification, our findings suggest that more intense PPP lending boosted bank profit efficiency but decreased cost efficiency. We uncover channels for profit efficiency improvements through higher revenues from core deposits and lending, and a labour‐related channel for the decline in bank cost efficiency from hiring more employees and significantly increasing compensation expenses. Findings are robust to many checks and may have important implications for bank management and future government bailout policy design.

ISSN	0963-8008, 1468-0416
h-index	30

Publication Information	Publisher: Wiley-Blackwell Publishing Ltd，Publishing cycle: ，Journal Type: journal，Open Access Journals: No
Basic data	Year of publication: 2003，Proportion of original research papers: 0.00%，Self Citation Rate:N.A.， Gold OA Rate: 0.00%

Financial Markets, Institutions and Instruments

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Share Submission Experience

Being stranded with fossil fuel reserves? Climate policy risk and the pricing of bank loans

The political and economic environment promoting growth in American wealth inequality

Credit ETFs in Mutual Funds and Corporate Bond Liquidity

Intensified Competition and The Impact on Credit Ratings in the RMBS market

Across‐the‐Curve Credit Spread Indices

The political and economic environment promoting growth in American wealth inequality

Does it cost to be politically connected? An examination of the grabbing hand hypothesis using corporate taxes

Do high‐centrality CEOs influence audit outcomes?

Do banks adjust their capital when they face liquidity shortages? Evidence from U.S. commercial banks

Piercing through the haze: Did PPP increase versus decrease bank efficiency?