Calendrier du 30 janvier 2019
Economic History Seminar
Du 30/01/2019 de 10:00 à 12:00
Salle R2.20, Campus Jourdan, 48 boulevard Jourdan, 75014 Paris
MOORE Lyndon (U. of Melbourne)
Railroad Bailouts in the Great Depression.
écrit avec Toby Daglish (Victoria University of Wellington)
U.S. railroads received loans from the Reconstruction Finance Corporation starting in Febru-
ary 1932, at below-market rates, primarily to meet interest and principal repayments on their
debt. Almost all loan requests were approved. The rst loan approval that a railroad received
was associated with a 55 basis point increase in the credit spreads of its bonds, even after condi-
tioning on observable determinants of credit risk. The benet of receiving a loan at concessional
interest rates was outweighed by the negative signal that the rm was unable to access credit
through regular channels. Subsequent RFC loans are weakly associated with lower credit spreads
for the railroad's bonds. Speculative grade railroad bonds are the most aected by news of a
government loan, those bonds' spreads increase by over 260 basis points, whereas investment
grade bonds' spreads are little changed.