unit, a so-called bad bank. This plan effectively addresses three key challenges. It provides for the transparent removal …

The inability of most bank merger studies to control for hidden bailouts may lead to biased results. In this study, we … employ a unique data set of approximately 1,000 mergers to analyze the determinants of bank mergers. We use data on the …

-out unit, a so-called bad bank. The key element of the plan is the valuation of troubled assets at their current market value … recapitalize the good bank by taking an equity stake in it. In extreme cases, this would mean a takeover of the bank by the …. A clear emphasis that the government stake is temporary would also be necessary. The government would cover the bad bank …

The inability of most bank merger studies to control for hidden bailouts may …

represent exogenous shocks to the (initially non-distressed) acquiring bank. We find that in the years after a distressed merger … acquiring bank and not by real economic contagion …