Recapitalizing Banking Systems Implications For Incentives And Fiscal And Monetary Policy
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Recapitalizing Banking Systems
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Author : Patrick Honohan
language : en
Publisher: World Bank Publications
Release Date : 2001
Recapitalizing Banking Systems written by Patrick Honohan and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with Bank failures categories.
After a banking crisis, when authorities have decided to use budgetary funds to help restructure a large failed bank or banking system, apparent conflicts between various goals (involving incentives for the new bank management, for the government's budget, and for monetary stability) can be resolved by suitably designing financial instruments and appropriately allocating responsibility between different arms of government.
Recapitalizing Banking Systems
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Author : Patrick Honohan
language : en
Publisher:
Release Date : 2016
Recapitalizing Banking Systems written by Patrick Honohan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
After a banking crisis, w ...
Recapitalizing Banking Systems Implications For Incentives And Fiscal And Monetary Policy
DOWNLOAD
FREE 30 Days
Author : Patrick Honohan
language : en
Publisher:
Release Date : 1999
Recapitalizing Banking Systems Implications For Incentives And Fiscal And Monetary Policy written by Patrick Honohan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999 with categories.
February 2001 After a banking crisis, when authorities have decided to use budgetary funds to help restructure a large failed bank or banking system, apparent conflicts between various goals (involving incentives for the new bank management, for the government's budget, and for monetary stability) can be resolved by suitably designing financial instruments and appropriately allocating responsibility between different arms of government. In the aftermath of a banking crisis, most attention is rightly focused on allocating losses, rebuilding properly managed institutions, and achieving debt recovery. But the authorities' decision to use budgetary funds to help restructure a large failed bank or banking system also has consequences for the incentive structure for the new bank management, for the government's budget, and for monetary stability. These issues tend to be lumped together, but each should be dealt with in a distinctive manner. Honohan points out, among other things, how apparent conflicts between the goals in each of these areas can be resolved by suitably designing financial instruments and appropriately allocating responsibility between different arms of government. First the government must have a coherent medium-term fiscal strategy that determines broadly how the costs of the crisis will be absorbed. Then the failed bank must be securely reestablished with enough capital and franchise value to move forward as a normal bank. This will typically entail new financial instruments involving the government on both the asset and the liability sides of the bank's balance sheet. The bank should not be left with mismatches of maturity, currency, or repricing. Assets that are injected should be bankable and preferably negotiable. The liability structure should give bank insiders the incentive to manage the bank prudently. Financial instruments can be complex and sophisticated but only if the government has the credibility to warrant market confidence that it will deliver on the contracts rather than trying to use its lawmaking powers to renege. Innovative use of segregating sinking funds and "Brady"--Type bonds can help where government credibility is weak. Restructuring the bank will alter the size, maturity, and other characteristics of the government's debt. These characteristics should be optimized separately and with the market as a whole, not just the affected banks. This paper--a product of Finance, Development Research Group--is part of a larger effort in the group to examine the effects of bank regulation. The author may be contacted at [email protected].
From Banking To Sovereign Stress Implications For Public Debt
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Author : International Monetary Fund
language : en
Publisher: International Monetary Fund
Release Date : 2014-12-22
From Banking To Sovereign Stress Implications For Public Debt written by International Monetary Fund and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-12-22 with Business & Economics categories.
This paper explores how banking sector developments and characteristics influence the propagation of risks from the banking sector to sovereign debt, including how they affect the extent of fiscal costs of banking crises when those occur. It then proposes practices and policies for the fiscal authorities to help manage the risks and enhance crisis preparedness.
Lessons And Policy Implications From The Global Financial Crisis
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Author : Mr.Luc Laeven
language : en
Publisher: International Monetary Fund
Release Date : 2010-02-01
Lessons And Policy Implications From The Global Financial Crisis written by Mr.Luc Laeven and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-02-01 with Business & Economics categories.
The ongoing global financial crisis is rooted in a combination of factors common to previous financial crises and some new factors. The crisis has brought to light a number of deficiencies in financial regulation and architecture, particularly in the treatment of systemically important financial institutions, the assessments of systemic risks and vulnerabilities, and the resolution of financial institutions. The global nature of the financial crisis has made clear that financially integrated markets, while offering many benefits, can also pose significant risks, with large real economic consequences. Deep reforms are therefore needed to the international financial architecture to safeguard the stability of an increasingly financially integrated world.
The Maze Of Banking
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Author : Gary B. Gorton
language : en
Publisher: Oxford University Press
Release Date : 2015-03-03
The Maze Of Banking written by Gary B. Gorton and has been published by Oxford University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-03-03 with Business & Economics categories.
After the financial crisis of 2007-2008, analysts continue to question the security of banking sectors in nations in Europe, Latin America, Asia, and Africa. Why do such crises recur? What is it about the accumulation of bank debt that potentially jeopardizes national and global banking systems? There is no one better-equipped to answer such questions than Gary Gorton, who has been studying financial crises since his PhD thesis in 1983. The Maze of Banking contains a collection of his academic papers on the subjects of banks, banking, and financial crises. The papers in this volume span almost 175 years of U.S. banking history, from pre-U.S. Civil War private bank notes issued during the U.S. Free Banking Era (1837-1863), followed by the U.S. National Banking Era (1863-1914) before there was a central bank, through loan sales, securitization, and the financial crisis of 2007-2008. Banking changed profoundly during these 175 years, yet it did not change in fundamental ways. The forms of money changed, resulting in associated changes in the information structure of the economy. Bank debt evolved as an instrument for storing value, smoothing consumption, and transactions, but its fundamental nature did not change. In all its forms, it is vulnerable to bank runs without government intervention. Comprehensive and informative, the collection is the definitive volume on the history of the U.S. banking system. These papers provide the framework for understanding how the financial crisis of 2007-2008 developed and steps to promote a stable banking industry, thereby preventing future economic crises. The Maze of Banking is essential reading material for students and academics with an interest in economics, finance, and the history of banking.
Liquidity And Crises
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Author : Franklin Allen
language : en
Publisher: Oxford University Press, USA
Release Date : 2011-02-03
Liquidity And Crises written by Franklin Allen and has been published by Oxford University Press, USA this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-02-03 with Business & Economics categories.
One important cause of the 2007-2009 crisis was illiquidity combined with exposure of many financial institutions to liquidity needs. But what is liquidity and why is it so important for financial institutions to command enough liquidity? This book brings together classic articles and recent contributions to this important field.
The Value Of Relationship Banking During Financial Crises
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Author : Giovanni Ferri
language : en
Publisher: World Bank Publications
Release Date : 2001
The Value Of Relationship Banking During Financial Crises written by Giovanni Ferri and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with Bancos - Corea categories.
Relationship banking, with surviving banks, has a positive value during a systemic financial crisis. For many viable small and medium-size businesses in the Republic of Korea, relationship banking reduced liquidity constraints and thus diminished the probability of unwarranted bankruptcy during the country's financial crisis of 1997-98.
Oecd Economic Surveys Turkey 2002
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Author : OECD
language : en
Publisher: OECD Publishing
Release Date : 2002-10-24
Oecd Economic Surveys Turkey 2002 written by OECD and has been published by OECD Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002-10-24 with categories.
This 2002 edition of OECD's periodic reviews of Turkey's economy examines recent economic developments, policies and prospects and includes special features on banking system restructuring and structural reforms for a new role for the public sector.
Controlling The Fiscal Costs Of Banking Crises
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Author : Patrick Honohan
language : en
Publisher: World Bank Publications
Release Date : 2000
Controlling The Fiscal Costs Of Banking Crises written by Patrick Honohan and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2000 with Bank categories.
In recent decades, a majority of countries have experienced a systemic banking crisis requiring a major-and expensive-overhaul of their banking system. Not only do banking crises hit the budget with outlays that must be absorbed by higher taxes (or spending cuts), but they are costly in terms of forgone economic output. Many different policy recommendations have been made for limiting the cost of crises, but there has been little systematic effort to see which recommendations work in practice. The authors try to quantify the extent to which fiscal outlays incurred in resolving banking distress can be attributed to crisis management measures of a particular kind adopted by the government in the early years of the crisis. They find evidence that certain crisis management strategies appear to add greatly to fiscal costs: unlimited deposit guarantees, open-ended liquidity support, repeated recapitalization, debtor bail-outs, and regulatory forbearance. Their findings clearly tilt the balance in favor of a strict rather than an accommodating approach to crisis resolution. At the very least, regulatory authorities who choose an accommodating or gradualist approach to an emerging crisis must be sure they have some other way to control risk-taking.