The Economics of Bank Restructuring: Understanding the Options

Augustin Landier and Kenichi Ueda

No 2009/012, IMF Staff Position Notes from International Monetary Fund

Abstract: Based on a simple framework, this note clarifies the economics behind bank restructuring and evaluates various restructuring options for systemically important banks. The note assumes that the government aims to reduce the probability of a bank’s default and keep the burden on taxpayers at a minimum. The note also acknowledges that the design of any restructuring needs to take into consideration the payoffs and incentives for the various key stakeholders (i.e., shareholders, debt holders, and government).

Keywords: SPN; debt holder; default probability; asset sale; asset value; bank assets; preferred shares; equity holder; debt-for-equity swap; asset quality; asset guarantee; Stocks; Asset valuation; Asset management; Distressed assets; Securities (search for similar items in EconPapers)
Pages: 39
Date: 2009-06-05
References: Add references at CitEc
Citations: View citations in EconPapers (42)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=22996 (application/pdf)

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:imf:imfspn:2009/012

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Staff Position Notes from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().