Trade-offs in Bank Resolution
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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. 2018/002
Subject:
Bank resolution Bank resolution framework Banking Financial crises Financial sector policy and analysis Financial sector stability Moral hazard Spillovers
English
Publication Date:
February 9, 2018
ISBN/ISSN:
9781484341001/2617-6750
Stock No:
SDNEA2018002
Pages:
42
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