We propose a framework for testing the effects of changes in bank resolution regimes on bank behavior. By exploiting the differential relevance of recent changes in U.S. bank resolution (i.e., the introduction of the Orderly Liquidation Authority, OLA) for different types of banks, we are able...

This paper analyzes the impact of rules-based bank insolvency resolution on real economic growth. Resolving insolvent banks can positively affect the real economy by overcoming moral hazard problems and improving banks’ credit allocation and monitoring. We propose a new indicator to measure...