The pricing of bank debt guarantees

Stefan Arping

Economics Letters, 2010, vol. 108, issue 2, 119-121

Abstract: We analyze the desirability of fair pricing of government guarantees for bank liabilities. Fair pricing is desirable only if the banking sector is sufficiently transparent. In opaque banking systems, fair pricing may exacerbate banks' incentive to take excessive risks.

Keywords: Bank; debt; guarantees; Fair; pricing; Transparency; Financial; stability (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:108:y:2010:i:2:p:119-121

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