The treatment of distressed banks

Mathias Dewatripont and Jean Rochet

Financial Stability Review, 2009, issue 13, 65-74

Abstract: This article suggests some reforms of regulatory architecture for the treatment of distressed banks. Our main recommendations are: • a special bankruptcy regime for banks should be implemented ; • strong, truly independent supervisory agencies should be established ; • the incentives of the top managers of distressed banks should not be kept unchecked ; • procyclicality of solvency regulations should be dampened by the introduction of “automatic stabilisers” ; • one should move toward centralised supervision in economic areas which are meant to be integrated.

Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:fisrev:2009:13:7

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