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bailout, the bailout value incurred by the government following the abandonment of the private shareholders, and, moreover … particular on assessing the difference that an assumed bail-in as opposed to bail-out regime can make. …
Persistent link: https://www.econbiz.de/10011910725
On 3 December EY hosted a SUERF conference on banking reform with Sir Howard Davies, the Chairman of RBS, and Dame Colette Bowe, the Chairman of the Banking Standards Board, as the two keynote speakers. Professor David Miles (Imperial College) gave the SUERF 2015 Annual Lecture on Capital and...
Persistent link: https://www.econbiz.de/10011557140
Today's regulatory rules, especially the easily-manipulated measures of regulatory capital, have led to costly bank failures. We design a robust regulatory system such that (i) bank losses are credibly borne by the private sector (ii) systemically important institutions cannot collapse suddenly;...
Persistent link: https://www.econbiz.de/10010205879
The bail-in tool as implemented in the European bank resolution framework suffers from severe shortcomings. To some extent, the regulatory framework can remedy the impediments to the desirable incentive effect of private sector involvement (PSI) that emanate from a lack of predictability of...
Persistent link: https://www.econbiz.de/10011720767
Persistent link: https://www.econbiz.de/10012436955
Persistent link: https://www.econbiz.de/10012829003
Turkey has experienced the biggest financial and economic shock in 2001 resulting a massive overhauling of its entire … beginning providing Turkey nearly $24 billion of financial assistance between the fragile years of 1999 and 2002. After 19 Stand … investor confidence enabled Turkey becoming the 16th largest economy in the world with over $1 trillion in GDP.1 On the …
Persistent link: https://www.econbiz.de/10012908845
We analyze shareholders' incentives to change the leverage of a firm that has already borrowed substantially. As a result of debt overhang, shareholders have incentives to resist reductions in leverage that make the remaining debt safer. This resistance is present even without any government...
Persistent link: https://www.econbiz.de/10009528814
We examine the pervasive view that "equity is expensive" which leads to claims that high capital requirements are costly for society and would affect credit markets adversely. We find that arguments made to support this view are fallacious, irrelevant to the policy debate by confusing private...
Persistent link: https://www.econbiz.de/10010203632
Capital regulation is critical to address distortions and externalities from intense conflicts of interest in banking and from the failure of markets to counter incentives for recklessness. The approaches to capital regulation in Basel III and related proposals are based on flawed analyses of...
Persistent link: https://www.econbiz.de/10011493332