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.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 8964

Klassifikation
Wirtschaft
Financial Institutions and Services: Government Policy and Regulation
International Monetary Arrangements and Institutions
International Fiscal Issues; International Public Goods
Thema
banking union
bank regulation
bailout policies

Ereignis
Geistige Schöpfung
(wer)
Haufler, Andreas
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and Ifo Institute (CESifo)
(wo)
Munich
(wann)
2021

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Haufler, Andreas
  • Center for Economic Studies and Ifo Institute (CESifo)

Entstanden

  • 2021

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