Financial Restructuring in Banking and Corporate Sector Crises: What Policies to Pursue? / Stijn Claessens, Daniela Klingebiel, Luc Laeven.

Format:

Book

Author/Creator:

Claessens, Stijn.

Contributor:

National Bureau of Economic Research.

Klingebiel, Daniela.

Laeven, Luc.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8386.

NBER working paper series no. w8386

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Financial Restructuring in Banking and Corporate Sector Crises

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2001.

Summary:

We review the literature on resolving bank and corporate sector crises to identify government policies that affect the depth of a crisis and the ease and sustainability of recovery, and to analyze their fiscal cost. A consistent framework - including sufficient resources for loss-absorption and private agents facing the right framework of sticks and carrots - is the, although often missing key to successful bank and corporate restructuring. Sustainability of restructuring calls for deeper structural reforms, which often requires dealing with political economy factors up-front. Using data for 687 corporations from eight crisis countries, we find empirically that a package of specific resolution measures can help accelerate the recovery from a crisis. These policies, however, come with significant fiscal costs.

Notes:

Print version record

July 2001.