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The impact of dealer failures on primary dealers and on the market for repurchase agreements

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  • Ann Marie Whyte

Abstract

This study examines the impact of the failures of government securities dealers and the eventual passage of the Government Securities Act (GSA) of 1986 on the stock prices of primary dealers and on repo rates. Results provide evidence that several failures elicited a negative stock market reaction although the results vary based on the type of dealer. The study provides evidence that average spreads in the repo market were significantly affected by several events although the direction of the change in spread varied. Additionally, there is evidence that the events surrounding the GSA's passage had a positive impact on bank dealers and elicited a mixed reaction in the repo market.

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  • Ann Marie Whyte, 1998. "The impact of dealer failures on primary dealers and on the market for repurchase agreements," Review of Financial Economics, John Wiley & Sons, vol. 7(1), pages 35-53.
    • Handle: RePEc:wly:revfec:v:7:y:1998:i:1:p:35-53
    DOI: 10.1016/S1058-3300(99)80144-X
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