The Single Point of Entry Resolution Strategy and Market Incentives

James R. Wigand

Chapter 14 in The New International Financial System:Analyzing the Cumulative Impact of Regulatory Reform, 2015, pp 323-336 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Resolving systemically important financial companies without providing public assistance has been an elusive objective. Although popularly characterized as ‘too big to fail’, in reality these companies are systemically important due to being too connected or integrated into the financial system to fail without causing harm to the broader economy. During the 2008 financial crisis policy makers opted to provide public support to systemically important firms rather than allowing them to fail and further destabilize an already distressed financial system. To address the immediate need to minimize economic fall-out, governments increased moral hazard and the market distortions resulting from ‘too connected to fail’…

Keywords: Financial Stability; Systemic Risk; Financial Regulation; Too-Big-to-Fail; Regulatory Burden; Financial Institutions (search for similar items in EconPapers)
Date: 2015
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