The Effects of the New European Bank Resolution Framework

Angela Maddaloni and Giulia Scardozzi

Review of Corporate Finance, 2023, vol. 3, issue 3, 451-480

Abstract: Changes in the bank resolution policy in the European Union (EU) induced some changes for the EU banking system. We discuss two main implications of the implementation of the bail-in resolution tool. First, we observe a general shift in the banks' liability structure toward less expensive sources of funding (e.g., customer deposits). We also examine the reallocation of banks' bond holdings across different investors. Mis-selling of risky bank bonds was common prior to the approval of the new resolution regulation. However, after the implementation of the bail-in mechanism, bank bonds have been reallocated more towards sophisticated financial intermediaries.

Keywords: Bail-in; EBU; banking resolution (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:now:jnlrcf:114.00000047

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