The paper focuses on a comparison of bank-based andmarket-based …nancial systems with respect to their ability to … period. In contrast, the bank-based system allows for both quick recovery and postponing and smoothing the negative …

fixed income unless the value of the bank’s assets falls below a predetermined threshold. In such an event, the debt … obligation is automatically converted to the bank’s common equities. By using a contingent claims valuation approach we present … bank that includes DES or alternatively subordinated debt in its capital structure. We compare and evaluate quantitatively …

central bank and supervisory authorities, and strengthening the rule of law. …

bank affiliates are strongly influenced by the capital allocation and credit steering mechanisms of the parent bank. The … credit growth of subsidiaries therefore potentially depends on the financial health of the foreign based parent bank. …

-2000, with detailed information on bank ownership. Our analysis shows that during crisis periods domestic banks contracted their … credit and deposit bases, whereas foreign banks did not. Also, home country conditions matter for foreign bank growth, as …

in risk to the banking sector. This questions the ''innocence'' of the bank owners in the crisis that have often followed … as a proportion of funds available. Finally we draw policy implication with respect to bank supervision, forbearance and … bank failure resolution procedures during the transition period, and about the so-called ''liberalization sequencing.'' …