ENGLISH

Systemic Financial Crises: Resolving Large Bank Insolvencies

By George G. Kaufman , Douglas Darrell Evanoff

Book information

Publisher
World Scientific Publishing Company
Year
2005
ISBN
9812563482, 9789812563484, 9789812569479
LCC
HG1521 .S97 2005
Open Library ID
OL3421308M
Language
english
Format
PDF
Filesize
2 MB (1821638 bytes)
Pages
474\474
Topic
Economy
Library
avaxhome.ws
Time added
2010-05-31 15:29:46

Description

Bank failures, like illness and taxes, are almost a certainty at some time in the future. What is less certain is their cost to and adverse implications for macro-economies. Past failures have frequently been resolved at very high cost to society. However, the cost could be reduced through having a well-developed, credible and widely publicized plan ready to put into action by policy-makers. If no such plan is ready when a large bank approaches insolvency, political pressures are likely to influence the response of regulators. Minimizing immediate, short-run costs are likely to outweigh minimizing further out, longer-run and longer-lasting costs, even if these delayed costs promise to be substantially greater. Stated differently, today will win out over tomorrow and politics will trump economics. How best to prevent such unfavorable outcomes is the major theme of this volume. The articles presented review past insolvency resolutions, draw lessons from these resolutions, discuss impediments to efficient resolutions - including cross-country, cross-regulator, and institutional challenges - and recommend how to move forward.

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