Hryckiewicz, Aneta; Kryg, Natalia; Tsomocos, Dimitrios P. - 2020
We study the effectiveness of three common bank resolution mechanisms: bailouts, bank sales, and ‘bad banks’. We first apply the financial fragility model of Goodhart et al. (2005, 2006a) to analyze the impact of these resolution mechanisms on bank behavior. We then use a novel bank-level...