Northern Rock, UK bank insolvency and cross-border bank insolvency (original) (raw)
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Crisis Management and Resolution for a European Banking System
IMF Working Papers, 2010
This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper proposes an integrated crisis management and resolution framework for the EU's single banking market. It comprises a European Resolution Authority (ERA), armed with the mandate and the tools to deal cost-effectively with failing systemic cross-border banks, and is designed to address many fundamental operational and incentive problems. It also seeks to reduce moral hazard and better protect countries against the risk of twin fiscal-financial crises by detaching banks from government budgets. The ERA would be most effective if it were twinned or combined with a European Deposit Insurance and Resolution Fund.
Resolution of Banking Crises: The Good, the Bad, and the Ugly
IMF Working Papers, 2010
This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper presents a new database of systemic banking crises for the period 1970-2009. While there are many commonalities between recent and past crises, both in terms of underlying causes and policy responses, there are some important differences in terms of the scale and scope of interventions. Direct fiscal costs to support the financial sector were smaller this time as a consequence of swift policy action and significant indirect support from expansionary monetary and fiscal policy, the widespread use of guarantees on liabilities, and direct purchases of assets. While these policies have reduced the real impact of the current crisis, they have increased the burden of public debt and the size of government contingent liabilities, raising concerns about fiscal sustainability in some countries.
Cleaning up the mess: Bank resolution in a systemic crisis
This commentary was also published on VoxEU, 6 June 2012 (http://www.voxeu.org/index.php?q=node/8069). CEPS Commentaries offer concise, policy-oriented insights into topical issues in European affairs. The views expressed are attributable only to the authors in a personal capacity and not to any institution with which they are associated.
Experiences of resolution of banking crises
1999
Fax: + 41 61 / 280 91 00 and + 41 61 / 280 81 00 © Bank for International Settlements 1999. All rights reserved. Brief excerpts may be reproduced or translated provided the source is stated.
Crisis Management and Resolution: Early Lessons from the Financial Crisis
Staff Discussion Notes, 2011
This paper compares the policy choices in recent and past crises, explains why those choices varied, and assesses the current state of financial and operational restructuring and institutional reform. While acknowledging the unique and global nature of the recent crisis and varying country circumstances, analysis suggests that the diagnosis and repair of financial institutions and overall asset restructuring are much less advanced than they should be at this stage and that moral hazard has increased. Consequently, vulnerabilities in the global financial system remain considerable and continue to threaten the sustainability of the recovery. These conclusions point to a number of steps to finish the business of financial sector repair and reform.
Options for Managing a Systemic Bank Crisis
SAPI EN. S. Surveys and …, 2009
The on-going financial crisis results not from a cyclical or managerial failure, but from a structural one: more than 96 other major banking crises occurred over the past 20 years, and these crashes have happened under very different regulatory systems and at different stages of ...
This paper investigates the role and necessity of system of crisis management of banking activity in present-day conditions. Particular attention is paid to the crisis management that is realized on the level of government and central bank. An overview and comparison of major anti-crisis instruments both in Ukraine and foreign countries is given. The research pays special attention to importance of Asset management companies. It is stated that crisis regulation should have preventive character, oriented at working out instruments and realization of such measures that would minimize the negative effect of external and internal surroundings.
1 ’ Options for Managing a Systemic Bank Crisis
2009
The on-going financial crisis results not from a cyclical or managerial failure, but from a structural one: more than 96 other major banking crises occurred over the past 20 years, and these crashes have happened under very different regulatory systems and at different stages of economic development. So far, conventional solutions are being applied—nationalization of the problem assets (as in the original Paulson bailout) or nationalization of the banks (as in Europe). These solutions only deal with the symptoms and not the systemic cause of today’s banking crisis. Similarly, the financial re-regulation that will be on everybody’s political agenda will, at best, reduce the frequency of such crises, but not avoid their re-occurrence. Better solutions are urgently needed because the last breakdown of this magnitude, the Great Depression of the 1930s, ended up in a wave of fascism and World War II.
As the financial crisis deepens, the temptations for each individual country to free ride increase and the need for coordination becomes more evident. The London Summit on 2 April should play a key role in generating such a coordinated response, by offering concrete, implementable results that can restore confidence and lead the way to recovery. Sound economic analysis is essential in designing this response, but delivering this analysis is a formidable challenge. It requires, first, a rigorous analysis of the key features of the financial crisis using the latest empirical evidence; and second, careful use of the theory and empirics as the basis for policy recommendations. For this reason, CEPR was delighted to join the Reinventing Bretton Woods Committee in organizing a seminar with the G20 Deputies on 31 January, hosted by HM Treasury and the Bank of England, at which preliminary versions of the papers in this e-book were presented.