Abolishing Public Guarantees in the Absence of Market Discipline

Konferenzbeitrag

This paper shows that the abolition of state guarantees to publicly owned banks in Germany resulted in an increase in refinancing costs at German savings banks. Rather than being the result of increased market discipline, the increase in refinancing costs is shown to be driven by spillover effects from German Landesbanken who themselves had suffered from the abolition of guarantees and who spread their own cost increase through the public banking network. Higher refinancing costs and the resulting drop in bank charter values translated into higher risk-taking at German savings banks.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2012: Neue Wege und Herausforderungen für den Arbeitsmarkt des 21. Jahrhunderts - Session: Banking and Public Policy ; No. E15-V3

Classification and Topics

• Classification: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation ; Structure, Scope, and Performance of Government

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Schnabel, Isabel ; Körner, Tobias
• Event: Veröffentlichung
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/65401
• Last update: 10.03.2025, 11:45 AM CET