Trade-offs in Bank Resolution

Giovanni Dell'ariccia, Maria Martinez Peria, Deniz Igan, Elsie Addo Awadzi, Marc Dobler and Damiano Sandri

No 2018/002, IMF Staff Discussion Notes from International Monetary Fund

Abstract: This SDN revisits the debate on bank resolution regimes, first by presenting a simple model of bank insolvency that transparently describes the trade-off involved between bail-outs, bail-ins, and larger capital buffers. The note then looks for empirical evidence to assess the moral hazard consequences of bail-outs and the systemic spillovers from bail-ins.

Keywords: SDN; bail in; bail-in power; central bank; public funds; holding company; Bank resolution; Spillovers; Financial regulation; resolution regime; bank stakeholder; recognition clause; bail-in process; bail-in regime; equity capital; bank equity; EU bail-in event; bail-out expectation; Bank resolution framework; Moral hazard; Financial sector stability; Global (search for similar items in EconPapers)
Pages: 42
Date: 2018-02-09
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Citations: View citations in EconPapers (11)

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