Trade-offs in Bank Resolution
By Giovanni Dell'Ariccia, Maria Soledad Martinez Peria & Deniz O Igan
- Release Date: 2018-02-09
- Genre: Economics
Description
This SDN revisits the debate on bank resolution regimes, first by presenting a simple model of bank insolvency that transparently describes the trade-off involved between bail-outs, bail-ins, and larger capital buffers. The note then looks for empirical evidence to assess the moral hazard consequences of bail-outs and the systemic spillovers from bail-ins.
