European Banking Recovery and Resolution Directive: Potential Impacts on European Systemic Important Financial Institutions

Clements A. Akinsoyinu
Additional contact information
Clements A. Akinsoyinu: Faculty of Finance, Cracow University of Economics

International Journal of Finance & Banking Studies, 2015, vol. 4, issue 3, 11-24

Abstract: The great recession heralded in by the subprime mortgage crisis, took a dramatic turn for worse as a result of collapse of the Lehman Brothers bank in September 2008. The crisis deemed to be the most devastating after the Great Depression of 1929, had a debilitating effect on world economies, developing and advanced alike. The extent of its devastation which isstill being felt in Europe and many parts of the globe reminds us the interconnectedness of financial institutions, particularly those tagged TBTF or SIFIs. Policy makers scrambled to curtail the ugly effect of the crisis by rescuing the SIFIs within their jurisdiction largely through bailout mechanism and provision of implicit guarantee for the debts of failing/failed institutions. As soon as the tide is stemmed, they cast their gaze on new crisis resolution and recovery measures that could rein in systemic risks associated with SIFIs, prevent future crises and reduce the concomitant moral hazards in the current resolution measures. The objective of this paper is to assess ex ante the potential impacts of implementing the new Banking recovery and resolution directives on Europe’s TBTF banks.

Keywords: bailouts; implicit guarantee; systemic risk; bail-in; asset-separation; too-big-to-fail; bridge bank; financial crisis; bank recovery; resolution (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.ssbfnet.com/ojs/index.php/ijfbs/article/view/369/308 (application/pdf)
https://www.ssbfnet.com/ojs/index.php/ijfbs/article/view/369 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rbs:ijfbss:v:4:y:2015:i:3:p:11-24

Access Statistics for this article

International Journal of Finance & Banking Studies is currently edited by Prof.Dr.Hasan Dincer

More articles in International Journal of Finance & Banking Studies from Center for the Strategic Studies in Business and Finance IJFBS Editorial Office, IMU, School of Business. Contact information at EDIRC.
Bibliographic data for series maintained by Hasan Dincer ().