A wide range of approaches has been applied to address banking and other financial crises. The nature of the approach depends on the nature of the crisis, its origins, evolution and context. Systemic banking crises are among the most common and costly to address. The experiences of the three...

This paper examines the evolution of the Pillar 2 framework for banks, introduced by the Basel 2 Accord, and discusses the main issues at stake in the current policy debate. The main objective of Pillar 2 was to complement the minimum requirements established by regulators (Pillar 1) with...

We investigate benefits to business borrowers from bank bailouts – specifically the Troubled Asset Relief Program (TARP). Applying difference-in-difference methodology to loan-level data, we find more favorable contract terms in five dimensions – spread, amount, maturity, collateral, and...

Intervention has taken different forms in different countries and periods of time. Moreover, the high interconnection of financial institutions makes the (implicitly or explicitly) promise of no intervention made by governments barely credible. Moreover, it is largely claimed that these...

Moving into and out of a financial and banking crisis is likely to be associated with spillover effects from the banking sector to the corporate sector. We investigate whether and how government interventions in the U.S. banking sector influence the stock market performance of corporate...

This essay examines how securitization served as a new coupling rod joining cycles in real estate and banking markets and created a new pathway for financial contagion in the “subprime” financial crisis. Legal changes promoted the growth of securitization and improved this crisis...

Foreign bank lending has stopped growing since the global financial crisis. Changes in banks' business models, balance-sheet adjustments, as well as the tightening of banking regulations are potential drivers of this prolonged slowdown. The existing literature however suggests an opposite effect...

Anticipating a bailout in the event of a crisis distorts a bank's incentives in multiple dimensions. Bailout payments can, for example, lead banks to issue too much short-term debt while simultaneously underinvesting in liquid assets. To correct these distortions, policymakers may choose to...

The analysis of bank failures enables the understanding of the relevant financial and economic factors underlying the bank's solvability and survival in a sound and competitive banking system, allowing a preventive behavior for bank management and regulators.This research is focused on the study...