Should Derivatives Be Privileged in Bankruptcy?

• 成果类型: Article
• 署名作者: Bolton, Patrick; Oehmke, Martin
• 署名单位: Columbia University; National Bureau of Economic Research; Centre for Economic Policy Research - UK
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12201
• 发表日期: 2015
• 页码: 2353-2394
• 关键词: risk-management; debt; OWNERSHIP; CONTRACTS; PROPERTY; maturity; MARKETS; COSTS

摘要

Derivatives enjoy special status in bankruptcy: they are exempt from the automatic stay and effectively senior to virtually all other claims. We propose a corporate finance model to assess the effect of these exemptions on a firm's cost of borrowing and incentives to engage in derivative transactions. While derivatives are value-enhancing risk management tools, seniority for derivatives can lead to inefficiencies: it transfers credit risk to debtholders, even though this risk is borne more efficiently in the derivative market. Seniority for derivatives is efficient only if it provides sufficient cross-netting benefits to derivative counterparties that provide hedging services.