Creditor Control Rights and the Information Content of Global CDS Markets

Seminar abstract

This paper traces the non-synchronicity of global corporate Credit Default Swap (CDS) spreads to uncover that strong creditor protection inversely affects firm-specific information production. 

This result could reflect a weakened monitoring incentive by creditors or debtors strategically disclosing information to disclosing information to avoid creditors' intervention. This "dark side" of creditor rights is concentrated in firms with a high level of firm risk, investment intensity and information opacity.

Additionally, local cultural attitudes like trust and uncertainty tolerance intensify the effects.

A difference in differences analysis shows that exogenous pro-creditor bankruptcy reforms lead to an economically sizeable decline in CDS non-synchronicity confirming the cross-country evidence.

Booking

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Speaker bio

Dr Eliza Wu is an Associate Professor in Finance at the University of Sydney Business School. Prior to this role she was an Associate Professor in Finance at the University of Technology Sydney from 2011 until 2015. She has also worked a Senior Lecturer in Finance at the University of New South Wales (UNSW).

She has a joint honours degree in economics and econometrics and a PhD in Finance from UNSW.

Eliza was a visiting Associate Professor at the University of Zurich and taught in the Swiss Finance Institute's PhD Programme during 2011. She has also been a visiting scholar at New York University's Stern School of Business as well as Cass Business school in London.

Eliza's research interests lie with empirical finance and banking.

Her research is focused on the

• dynamic behaviour of international financial markets,
• financial institutions,
• the impact of financial regulations
• sovereign credit risk
• the role of information intermediaries 

Eliza has published over 35 international academic journal articles and book chapters and her research papers have been accepted for presentations in leading finance conferences including;

• the annual meeting of the American Finance Association
• American Economic Association
• American Accounting Association
• the European Finance Association
• the Northern Finance Association
• the Financial Intermediation Research Society

Her research has also been awarded best paper prizes internationally and she is a chief investigator on a current ARC Discovery grant.