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The problem with government interventions: The wrong banks, inadequate strategies, or ineffective measures?

Aneta Hryckiewicz

MPRA Paper from University Library of Munich, Germany

Abstract: The most recent crisis prompted regulatory authorities to implement directives prescribing actions to resolve systemic banking crises. Recent findings show that government intervention results in only a small proportion of bank recoveries. This study examines the reasons for this failure and evaluates the effectiveness of regulatory instruments, demonstrating that weaker banks are more likely to receive government support, that the support extended addresses banks’ specific issues, and that supported banks are more likely to face bankruptcy than non-supported banks. Therefore, government interventions must be sufficiently large, and an optimal banking recovery program must include a deep restructuring process.

Keywords: Bank risk; business models; bank regulation; financial crisis; banking stability (search for similar items in EconPapers)
JEL-codes: E58 G15 G21 G32 (search for similar items in EconPapers)
Date: 2014-06-18
New Economics Papers: this item is included in nep-ban, nep-cba, nep-cfn and nep-mac
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Working Paper: The problem with government interventions: The wrong banks, inadequate strategies, or ineffective measures? (2014) Downloads
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