Arbeitspapier
Regulatory and Bailout Decisions in a Banking Union
We model a banking union of two countries whose banking sectors differ in their average probability of failure and externalities between the two countries arise from cross-border bank ownership. The two countries face (i) a regulatory decision of which banks are to be shut down before they can go bankrupt, and (ii) a loss allocation – or bailout – decision of who pays for banks that have failed despite regulatory oversight. Each of these choices can either be taken in a centralized or in a decentralized way. In our benchmark model the two countries always agree on a centralized regulation policy. In contrast, bailout policies are centralized only when international spillovers from cross-border bank ownership are strong, and banking sectors are highly profitable.
- Language
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Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 8964
- Classification
-
Wirtschaft
Financial Institutions and Services: Government Policy and Regulation
International Monetary Arrangements and Institutions
International Fiscal Issues; International Public Goods
- Subject
-
banking union
bank regulation
bailout policies
- Event
-
Geistige Schöpfung
- (who)
-
Haufler, Andreas
- Event
-
Veröffentlichung
- (who)
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Center for Economic Studies and Ifo Institute (CESifo)
- (where)
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Munich
- (when)
-
2021
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Haufler, Andreas
- Center for Economic Studies and Ifo Institute (CESifo)
Time of origin
- 2021
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