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How do resolution frameworks affect the private restructuring of distressed banks? We model a distressed bank's shareholders and creditors negotiating a restructuring given asymmetric information about asset quality and externalities onto the government. This yields negotiation delays used to...
Persistent link: https://www.econbiz.de/10012118187
The Indian debt overhang issue is one of the major reasons that fresh investments are currently not being made in the scale required to promote higher growth and boost employment. Among banks the public sector banks (PSBs) are burdened with the bulk of net non-performing loans (NNPAs). These...
Persistent link: https://www.econbiz.de/10011638458
Persistent link: https://www.econbiz.de/10012250013
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/10011554963
In general, banks play a growth-enhancing role for the real economy. However, distorted incentives for banks, depositors, and regulators in connection with bank insolvency may corrupt banks' credit allocation and monitoring decisions, leading to suboptimal real economic outcomes. A rules-based...
Persistent link: https://www.econbiz.de/10009751064
This paper develops a debt-run model to study the effects of liquidity injections on debt markets in the presence of a renegotiation option. In the model, creditors decide when to withdraw their funding and equityholders can renegotiate the contract terms of debt. We show that when equityholders...
Persistent link: https://www.econbiz.de/10015055030
This paper analyzes the bail-in tool under the Bank Recovery and Resolution Directive (BRRD) and predicts that it will … avoidable embeddedness of the BRRD’s bail-in tool in the much broader resolution process, which entails ample discretion of the … under the minimum requirements for own funds and eligible liabilities (MREL) is preferable. Finally, this paper synthesized …
Persistent link: https://www.econbiz.de/10011720764
This paper analyses the bail-in tool under the BRRD and predicts that it will not reach its policy objective. To make … through risk-reflecting prices for bank capital. The main reason for this lies in the avoidable embeddedness of the BRRD …
Persistent link: https://www.econbiz.de/10011711663
This discussion paper investigates the differences existing between the Single Point of Entry and the Multiple Point of Entry resolution models and links this question to the issue of support that bank subsidiaries can expect from their parent companies both in resolution and in normal...
Persistent link: https://www.econbiz.de/10012605315
This paper empirically examines whether better governance necessarily reduces financial distress for banks.We have studied 49 banks among the TOP 100 European banks during the period 2006 to 2013 and performed a panel probit regression analysis on the financial distress dummy as our dependent...
Persistent link: https://www.econbiz.de/10012954970