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“Intoxicated Investors” Slammed Corporate Bonds

Jul 22, 2010 Ayako Yasuda The Role of Institutional Investors in Propagating the Crisis of 2007-2008 CFO

What caused corporate bond yields to balloon as the financial crisis deepened in 2007 and 2008?

This article cites Associate Professor Ayako Yasuda’s study “The Behavior of Intoxicated Investors: The Role of Institutional Investors in Propagating the Crisis of 2007-2008,” which found that corporate bonds held by investors that had high exposures to securitized bonds experienced greater price declines in late 2007 and 2008.

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In the News

Jul 22, 2010 Ayako Yasuda The Role of Institutional Investors in Propagating the Crisis of 2007-2008 CFO

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Ayako Yasuda
Associate Professor of Management

Jun 1, 2011 Finance Ph.D., Stanford University

Research Expertise: Economics of financial intermediation, particularly investment banking, commercial banking, and venture capital/private equity; corporate finance

Associate Professor Ayako Yasuda wants to shed light on the economic roles played by financial intermediaries such as banks, venture capital/private equity funds, and institutional investors that influence a firm’s access to capital. She also wants to examine how incentives (given through compensation contracts, reputation, etc.) impact the actions of specific agents within these institutions.

Gallagher Hall
Room 3206

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(530) 752-0775

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asyasuda[remove-this-and-replace-with-at]ucdavis.edu

Research

The Role of Institutional Investors in Propagating the Crisis of 2007-2008
Journal of Financial Economics, 2011

Oct 1, 2011 Ayako Yasuda "Intoxicated Investors" Slammed Corporate Bonds Finance

Using a novel data of institutional investors’ bond holdings, Associate Professor Ayako Yasuda and co-authors Alberto Manconi from Tilburg University and Massimo Massa from INSEAD examine a transmission of the crisis of 2007-08 from the securitized bond market to the corporate bond market via joint ownership of these bonds by investors.

The authors posit that, ceteris paribus, corporate bonds held by investors with high exposure to securitized bonds and liquidity needs experience greater selling pressure and price declines (yield increases) at the onset of the crisis.

UC Davis Graduate School of Management

“Intoxicated Investors” Slammed Corporate Bonds

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Ayako Yasuda
Associate Professor of Management

The Role of Institutional Investors in Propagating the Crisis of 2007-2008
Journal of Financial Economics, 2011

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“Intoxicated Investors” Slammed Corporate Bonds

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