Anticipating individual bank rescues

Ricardo Correia, Tomasz Dubiel-Teleszynski and Javier Población

Economic Modelling, 2019, vol. 82, issue C, 345-360

Abstract: We construct a structural model to determine the cost of a bank rescue. Moreover, our model can estimate the likelihood and timing of a bank rescue. With respect to bank characteristics, theoretical results in this paper show that a rescue is more likely when growth in cash flow is low, operational risk is high and costs are high. The empirical application of our model to an apparently homogeneous sample of countries generates reasonable estimates for the likelihood and costs of a bank rescue. However, our results also show that the optimal model specifications are independent of size, geographical proximity and cultural similarities.

Keywords: Structural model; Bank rescues; Bail-out; Bail-in (search for similar items in EconPapers)
JEL-codes: G21 G28 H81 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999318303201
Full text for ScienceDirect subscribers only

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:eee:ecmode:v:82:y:2019:i:c:p:345-360

DOI: 10.1016/j.econmod.2019.01.018

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().