Bad Regulation: Too Big to Fail, Bail-Out and Bail-In

Imad A. Moosa
Additional contact information
Imad A. Moosa: Royal Melbourne Institute of Technology (RMIT)

Chapter 10 in Good Regulation, Bad Regulation, 2015, pp 192-211 from Palgrave Macmillan

Abstract: Abstract As we saw in Chapter 2, a (flawed) argument for regulation is that the government should intervene to prevent “important” enterprises from failure—this is the TBTF argument. In this chapter we address the actions taken by regulators to save failing financial institutions that have the TBTF status by bailing them out (using taxpayers’ money) or bailing them in (using depositors’ money). This is what is meant by “bad regulation” in the heading of this chapter. However, regulation aimed at mitigating the TBTF problem by preventing the occurrence of a TBTF situation is good regulation. In fact, it will be argued that good regulation is required to deal with the TBTF problem.

Keywords: Financial Institution; Moral Hazard; Systemic Risk; Hedge Fund; Global Financial Crisis (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:pal:pmschp:978-1-137-44710-4_10

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137447104

DOI: 10.1057/9781137447104_10

Access Statistics for this chapter

More chapters in Palgrave Macmillan Studies in Banking and Financial Institutions from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().