The Economics of Bank Restructuring: Understanding the Options

June 5, 2009

Preview Citation

Format: Chicago

Augustin Landier, and Kenichi Ueda. The Economics of Bank Restructuring: Understanding the Options, (USA: International Monetary Fund, 2009) accessed July 8, 2025

Summary

Based on a simple framework, this note clarifies the economics behind bank restructuring and evaluates various restructuring options for systemically important banks. The note assumes that the government aims to reduce the probability of a bank’s default and keep the burden on taxpayers at a minimum. The note also acknowledges that the design of any restructuring needs to take into consideration the payoffs and incentives for the various key stakeholders (i.e., shareholders, debt holders, and government).

Subject: Asset and liability management, Asset management, Asset valuation, Banking, Distressed assets, Financial institutions, Financial sector policy and analysis, Securities, Stocks

Keywords: Asset guarantee, Asset management, Asset quality, Asset sale, Asset valuation, Asset value, Bank assets, Debt holder, Debt-for-equity swap, Default probability, Distressed assets, Equity holder, Preferred shares, Securities, SPN, Stocks

Publication Details

Pages:

39
Volume:

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DOI:

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Issue:

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Series:

Staff Position Note No. 2009/012
Stock No:

SPNEA2009012
ISBN:

9781462337422
ISSN:

2617-6742

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