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unprecedentedly during the recent financial crisis, may impose indirect costs to financial stability if bailout expectations of … participants adjusted their bailout expectations in response to government interventions, undermining market discipline mechanisms …
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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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- visory) decision of which banks are to be shut down before they can go bankrupt, and (ii) a bailout decision of who pays for … decentralized way. In our benchmark model the two countries always agree on a centralized regulation policy. In contrast, bailout …
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which banks are to be shut down before they can go bankrupt, and (ii) a loss allocation – or bailout – decision of who pays … contrast, bailout policies are centralized only when international spillovers from cross-border bank ownership are strong, and …
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, a new financial safety net should involve suitable bailout penalties and central banks that can resort to constructive …
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We show that market discipline, defined as the extent to which firm specific risk characteristics are re ected in market prices, eroded during the recent financial crisis in 2008. We design a novel test of changes in market discipline based on the relation between firm specific risk...
Persistent link: https://www.econbiz.de/10010226557