Ambiguity, Efficieny and Bank Bailouts

Arbeitspapier

The paper examines the effects of ambiguity in regulation on the equilibrium allocation. Under ambiguous bailout policy, agents’ suffer from a lack of information with regards to the insolvency resolution method, which would be chosen by the regulator if a financial institution fails. In this case, beliefs of bankers regarding whether an insolvent bank is liquidated, may differ from those of depositors. The beliefs may be asymmetric even if bankers and depositors possess absolutely symmetric information about the policy of the regulator. It is shown that such asymmetry in beliefs can generate an allocative inefficiency of the bank based economy.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Discussion Paper Series ; No. 442

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Financial Institutions and Services: Government Policy and Regulation
• Thema: bank bailouts ; constructive ambiguity ; decision-making ; uncertainty ; Bankenregulierung ; Bankinsolvenz ; Entscheidung unter Unsicherheit ; Bank ; Allokationseffizienz ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Vinogradov, Dmitri V.
• Ereignis: Veröffentlichung
• (wer): University of Heidelberg, Department of Economics
• (wo): Heidelberg
• (wann): 2007

Weitere Informationen

• Handle: http://hdl.handle.net/10419/127263
• Letzte Aktualisierung: 20.09.2024, 08:20 MESZ