Staff Discussion Notes

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Format: Chicago

Giovanni Dell'Ariccia, Maria Soledad Martinez Peria, Deniz O Igan, Elsie Addo Awadzi, Marc C Dobler, and Damiano Sandri. Trade-offs in Bank Resolution, (USA: International Monetary Fund, 2018) accessed November 5, 2024

Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Summary

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.

Subject: Bank resolution, Bank resolution framework, Banking, Financial crises, Financial sector policy and analysis, Financial sector stability, Moral hazard, Spillovers

Keywords: Bail in, Bail-in power, Bail-in process, Bail-in regime, Bail-out expectation, Bank equity, Bank resolution, Bank resolution framework, Bank stakeholder, Central bank, Equity capital, EU bail-in event, Financial regulation, Financial sector stability, Global, Holding company, Moral hazard, Public funds, Recognition clause, Resolution regime, SDN, Spillovers

Publication Details

  • Pages:

    42

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Staff Discussion Notes No. 2018/002

  • Stock No:

    SDNEA2018002

  • ISBN:

    9781484341001

  • ISSN:

    2617-6750