a phenomenon in Germany for decades. As an institutional response, most German states implemented bailouts to restore … local public finances. This chapter gives a brief description of the history of municipal bailouts in Germany. We begin with … the first small bailout programme in North Rhine-Westphalia during the 1980s. In the aftermath of the global financial …

-equations model that specifies the probability of a bailout and banks’ risk taking.We identify the effect of expected bailout …-2006. The marginal effect of risk with respect to bailout expectations is 7.2 basis points. A change of bailout expectations by … reduce moral hazard. -- Banking ; supervision ; moral hazard ; intervention ; bailouts …