Market-Based Policy Instruments for Systemic Bank Restructuring

Author/Editor:

Tamim Bayoumi ; Paul R Masson

Publication Date:

August 1, 1998

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Since the early 1980s, well over 100 countries have experienced systemic bank insolvencies. An important innovation among the resulting policies for reestablishing bank soundness has been the reliance on market-based instruments and policies, in contrast to the largely non-market-oriented approach taken in the 1930s during the last big wave of banking crises. This paper surveys and assesses market-based policy instruments employed to overcome systemic bank problems. Considerations regarding the design and mix of instruments as well as cost-sharing arrangements are shown to be key aspects of effective bank restructuring. Selected country examples are used to illustrate best practices.

Series:

Working Paper No. 98/113

English

Publication Date:

August 1, 1998

ISBN/ISSN:

9781451944235/1018-5941

Stock No:

WPIEA1131998

Format:

Paper

Pages:

25

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