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Despite the importance of this issue, instruments to assess negative stereotypes about old age are scarce.
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These results indicate that banks with higher risks are more likely to issue capital instruments to absorb losses, although this effect is mitigated if they have accumulated sufficient LLR to absorb such losses.
While this is consistent with lower liquidity needs, this result could also be explained by a lower need to issue capital instruments to comply with the Basel ratio because the retained earnings compute as Tier I capital.
First, we find that banks issue financial instruments to cover liquidity needs and growth opportunities during the sample period.
Banks with higher liquidity constraints could be subject to tougher investment constraints, so they can be more likely to issue financial instruments to finance their growth.
If the decision on the instrument follows the pecking order, banks would only issue debt instruments to minimize the cost of asymmetric information and, therefore, the liquidity and growth variables would only be significant for debt issuances.
Banks more subject to informational problems will be more reluctant to issue instruments with high discounts due to asymmetric costs.
Table 3 presents the results from the multinomial logit of the decision to issue instruments that takes the decision of not to issue as the reference group.
A foreign central bank of issue is a bank which is by law or government sanction the principal authority, other than the government itself, issuing instruments intended to circulate as currency.
On the other hand, banks that issue instruments in the market that are about to reach maturity could find its easier to refinance them.
Nuveen hopes to issue variable-rate instruments to replace the auction-rate securities used as leverage in its closed-end funds.
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