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Time-inconsistency of no-bailout policies can create incentives for banks to take excessive risks and generate …
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Time-inconsistency of no-bailout policies can create incentives for banks to take excessive risks and generate …
Persistent link: https://www.econbiz.de/10013085550
Time-inconsistency of no-bailout policies can create incentives for banks to take excessive risks and generate …
Persistent link: https://www.econbiz.de/10013087435
reduce equilibrium interest rates. The interest rate effect dominates the leverage e¤ect and bailouts lead to fewer bank … bailout …
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The unchecked build-up of imbalances during the 2000s exposed the euro area to the risk of sudden stops. Such risk materialized in 2009-10 and its consequences were amplified by the absence of adequate institutions. Europe embarked on a thorough process of reforming its economic governance. We...
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