TY  - JOUR
AU  - Fernandez,Raquel
AU  - Ozler,Sule
TI  - Debt Concentration and Secondary Markets Prices: A Theoretical and      Empirical Analysis
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3654
PY  - 1991
Y2  - March 1991
UR  - http://www.nber.org/papers/w3654
L1  - http://www.nber.org/papers/w3654.pdf
N1  - Author contact info:
Raquel Fernández
Department of Economics
New York University
19 West 4th Street, 6th Floor
New York, NY  10012
Tel: 212/998-8908
Fax: 212/995-4186
E-Mail: raquel.fernandez@nyu.edu

Sule Ozler
UCLA
E-Mail: ozler@econ.ucla.edu
AB  - In the context of a model that distinguishes between large money center banks and smaller regional banks, we show that the percentage of a country's debt held by the large banks affects the secondary market price of that country's debt: the higher the concentration of the debt, the higher the secondary market price. We also show that the free trade of debt in the secondary market does not necessarily imply that the entire stock of debt will eventually be owned by the large banks. Our empirical analysis incorporates a number of potential determinants of secondary market prices. Among these are variables that are associated with a country's economic performance, variables that can be associated with the regulatory structure in the creditor's country, and the concentration of debt in the hands of the largest US banks. Our empirical findings indicate that concentration indeed has a positive effect on secondary market prices.
ER  -