Resolution of international banks: can smaller countries cope?

Dirk Schoenmaker

No 34, ESRB Working Paper Series from European Systemic Risk Board

Abstract: The stability of a banking system ultimately depends on the strength and credibility of the fiscal backstop. While large countries can still afford to resolve large global banks on their own, small and medium-sized countries face a policy choice. This paper investigates the impact of resolution on banking structure. The financial trilemma model indicates that smaller countries can either conduct joint supervision and resolution of their global banks (based on single point of entry resolution) or reduce the size of their global banks and move to separate resolution of these banks’ national subsidiaries (based on multiple point of entry resolution). Euro-area countries are heading for joint resolution based on burden sharing, while the UK and Switzerland have implemented policies to downsize their banks. JEL Classification: F30, G21, G28

Keywords: Burden Sharing; Global Financial Architecture; International Banks; Multiple Point of Entry; Resolution Planning; Single Point of Entry (search for similar items in EconPapers)
Date: 2017-02
New Economics Papers: this item is included in nep-ban and nep-cba
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Resolution of international banks: Can smaller countries cope? (2018)
Working Paper: Resolution of International Banks: Can Smaller Countries Cope? (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:srk:srkwps:201734

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