JEL classification

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Supervisors conduct early interventions with the aim of prompting banks to address their weaknesses. Interventions are normally based on discretionary powers and supervisory judgment. But some jurisdictions have introduced more formal intervention regimes which include sets of actions to be implemented when specific triggers are hit.

We ask which firms borrow in international bond markets when global investors favour risky debt. Previous research suggests that international bond issuance increases when investors' risk appetite is high. We believe this effect could be stronger for firms that benefit more from the search for yield. In addition, we seek to understand what the risks might be for domestic economies. We test if firms with a higher credit risk borrow more internationally when global risk appetite is high.