Trade-offs in Bank Resolution

Author/Editor:

Giovanni Dell'Ariccia ; Maria Soledad Martinez Peria ; Deniz O Igan ; Elsie Addo Awadzi ; Marc C Dobler ; Damiano Sandri

Publication Date:

February 9, 2018

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Summary:

This SDN revisits the debate on bank resolution regimes, first by presenting a simple model of bank insolvency that transparently describes the trade-off involved between bail-outs, bail-ins, and larger capital buffers. The note then looks for empirical evidence to assess the moral hazard consequences of bail-outs and the systemic spillovers from bail-ins.

Series:

Staff Discussion Notes No. 18/02

Subject:

English

Publication Date:

February 9, 2018

ISBN/ISSN:

9781484341001/2617-6750

Stock No:

SDNEA2018002

Format:

Paper

Pages:

42

Please address any questions about this title to publications@imf.org