Arbeitspapier
Can European Bank Bailouts work?
Cross-border banking needs cross-border recapitalisation mechanisms. Each mechanism, however, suffers from the financial trilemma, which is that cross-border banking, national financial autonomy and financial stability are incompatible. In this paper, we study the efficiency of different burden sharing agreements for the recapitalisation of the 30 largest banks in Europe. We consider bank bailouts for these banks in a simulation framework with stochastic country-specific bailout benefits. Among the burden sharing rules, we find that the majority and qualified-majority voting rules come close to the efficiency of a bailout mechanism with a supranational authority. Even a unanimous voting rule works better than home-country bailouts, which are very inefficient.
- Language
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Englisch
- Bibliographic citation
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Series: Tinbergen Institute Discussion Paper ; No. 12-111/IV/DSF43
- Classification
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Wirtschaft
International Monetary Arrangements and Institutions
Financial Institutions and Services: Government Policy and Regulation
Public Goods
- Subject
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Financial Stability
Public Good
International Monetary Arrangements
International
Bankgeschäft
Internationale Bank
Refinanzierung
Finanzkrise
Schuldenübernahme
Wirkungsanalyse
Europa
- Event
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Geistige Schöpfung
- (who)
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Schoenmaker, Dirk
Siegmann, Arjen
- Event
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Veröffentlichung
- (who)
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Tinbergen Institute
- (where)
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Amsterdam and Rotterdam
- (when)
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2012
- Handle
- Last update
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20.09.2024, 8:23 AM CEST
Data provider
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Object type
- Arbeitspapier
Associated
- Schoenmaker, Dirk
- Siegmann, Arjen
- Tinbergen Institute
Time of origin
- 2012