EconPapers    
Economics at your fingertips  
 

Anatomy of a Bail-In

Thomas Conlon () and John Cotter ()

Papers from arXiv.org

Abstract: To mitigate potential contagion from future banking crises, the European Commission recently proposed a framework which would provide for the $\textit{bail-in}$ of bank creditors in the event of failure. In this study, we examine this framework retrospectively in the context of failed European banks during the global financial crisis. Empirical findings suggest that equity and subordinated bond holders would have been the main losers from the 535 billion euro impairment losses realized by failed European banks. Losses attributed to senior debt holders would, on aggregate, have been proportionally small, while no losses would have been imposed on depositors. Cross-country analysis, incorporating stress-tests, reveals a divergence of outcomes with subordinated debt holders wiped out in a number of countries, while senior debt holders of Greek, Austrian and Irish banks would have required bail-in.

Date: 2014-03
New Economics Papers: this item is included in nep-ban, nep-cba and nep-eec
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20) Track citations by RSS feed

Published in Journal of Financial Stability, 2014

Downloads: (external link)
http://arxiv.org/pdf/1403.7628 Latest version (application/pdf)

Related works:
Journal Article: Anatomy of a bail-in (2014) Downloads
Working Paper: Anatomy of a Bail-In (2014) Downloads
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:arx:papers:1403.7628

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().

 
Page updated 2021-10-18
Handle: RePEc:arx:papers:1403.7628