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the interbank market. Using a simple network structure, it shows that if there is a non-zero bailout probability, banks …
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Bank bailouts are not the "one-shot" events commonly described in the literature. These bailouts are instead dynamic processes in which regulators "catch" financially distressed banks; "restrict" their activities over time; and "release" the banks from restrictions at sufficiently healthy capital...
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of bail-outs. Raising public funds to conduct a bail-out entails the deadweight loss of distortionary taxation. Bank bail …
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a bailout either if the bank is small in the economy or if the bank is large and the ex ante stability level of the bank …
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