1 option
Bail-ins and Bail-outs: Incentives, Connectivity, and Systemic Stability / Benjamin Bernard, Agostino Capponi, Joseph E. Stiglitz.
- Format:
- Book
- Author/Creator:
- Bernard, Benjamin.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w23747.
- NBER working paper series no. w23747
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Bail-ins and Bail-outs
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2017.
- Summary:
- This paper endogenizes intervention in financial crises as the strategic negotiation between a regulator and creditors of distressed banks. Incentives for banks to contribute to a voluntary bail-in arise from their exposure to financial contagion. In equilibrium, a bail-in is possible only if the regulator's threat to not bail out insolvent banks is credible. Contrary to models without intervention or with government bailouts only, sparse networks enhance welfare for two main reasons: they improve the credibility of the regulator's no-bailout threat for large shocks and they reduce free-riding incentives among bail-in contributors when the threat is credible.
- Notes:
- Print version record
- August 2017.
The Penn Libraries is committed to describing library materials using current, accurate, and responsible language. If you discover outdated or inaccurate language, please fill out this feedback form to report it and suggest alternative language.