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Bank funding strategy after the bail-in announcement

Journal of Corporate Finance 2022 74, 102215 open access
Euro area countries have recently moved to a new centralized bail-in framework by removing implicit public guarantees. Our paper analyzes banks' funding strategies after the bail-in proposal. We show that Euro area banks relied more on cheaper and better protected sources of funding, such as deposits, and reduced fund collection from sources with weaker creditor protection, such as bonds.