We provide a theory to investigate the implications of time-varying bailout policy for rational bubbles in an infinite … implications of the time-varying bailout policy. We find that the optimal bailout policy is leaning against the wind, striking a …

The declared intention of policy makers is that future bank restructuring should be conducted through bail-in rather … than bail-out. Over the past years there have been a few cases of European banks being restructured where creditors were … countries with limited fiscal space for bail-out. Moreover, actual bail-ins lead to stronger market reactions than the legal …

If a bank is facing insolvency, it will be tempted to reject good loans and accept bad loans so as to shift risk onto … ante- and ex post-efficient type of capital infusion, regardless of whether the bank volunteers for the recapitalization …

-2009 financial crisis. Governments injected into troubled institutions massive amounts of fresh capital and/or guaranteed bank assets … and liabilities. We employ event study methodology to estimate the impact of government-intervention announcements on bank … bank-and-time effects, virtually all announcement impacts vanish. The policy implication is that the large public …