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Trade-offs in Bank Resolution

Giovanni Dell'ariccia (), Maria Martinez Peria, Deniz Igan, Elsie Addo Awadzi, Marc C 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: Banking; Bank resolution framework; Spillovers; Moral hazard; Bank resolution; SDN,bail in,bail-in power,central bank,public funds,holding company (search for similar items in EconPapers)
Pages: 42
Date: 2018-02-09
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Handle: RePEc:imf:imfsdn:2018/002