Arbeitspapier

Cross-border resolution of global banks

Most recent regulations establish that resolution of global banking groups shall be done according to bail-in procedures and following a Single Point of Entry (SPE) as opposed to a Multiple Point of Entry (MPE) approach. The latter requires parent holding of global groups to put up front the equity capital needed to absorb losses possibly emerging in foreign subsidiaries-branches. No model rationalized so far such resolution regime. We build a model of optimal design of resolution regimes and compare three regimes: SPE with cooperative authorities, SPE with non-cooperative authorities and MPE (ring-fencing). We find that the costs for bondholders of bail-inable instruments is generally higher under noncooperative regimes and ring-fencing. We also find that in those cases banks have ex ante incentives to reduce their exposure in foreign assets. We also examine recent case studies that help us rationalize the model results.

Sprache
Englisch

Erschienen in
Series: SAFE Working Paper ; No. 88

Klassifikation
Wirtschaft
General Financial Markets: Government Policy and Regulation
Thema
single point of entry
multiple point of entry
strategic interaction of regulators
financial spillover
financial retrenchment

Ereignis
Geistige Schöpfung
(wer)
Faia, Ester
Weder di Mauro, Beatrice
Ereignis
Veröffentlichung
(wer)
Goethe University Frankfurt, SAFE - Sustainable Architecture for Finance in Europe
(wo)
Frankfurt a. M.
(wann)
2015

DOI
doi:10.2139/ssrn.2572882
Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Faia, Ester
  • Weder di Mauro, Beatrice
  • Goethe University Frankfurt, SAFE - Sustainable Architecture for Finance in Europe

Entstanden

  • 2015

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