Mink, M. & de Haan, J. (2014) “Spillovers from systemic bank defaults“, VoxEU Organisation, 24 Μαΐου.
To date, much uncertainty exists about how large the spillovers would be from the default of a systemically important bank. This column shows evidence that the market values of US and EU banks hardly respond to changes in the default risk of banks that the Financial Stability Board considers globally systemically important (G-SIBs). However, changes in all G-SIBs’ default risk explain a substantial part of changes in bank market values. These findings have implications for financial crisis management and prevention policies.
Financial crisis management and prevention policies often focus on mitigating spillovers from the default of systemically important banks. During the recent crisis, governments avoided large bank failures by insuring and purchasing intermediaries’ troubled assets, by providing them with capital injections, and even by outright nationalisations. After the crisis, financial regulators designed additional requirements for those institutions that the Financial Stability Board designated as globally systemically important banks (G-SIBs).
Σχετικές αναρτήσεις:
- Visco, I. (2013) “The aftermath of the crisis: Regulation, supervision and the role of central banks”, Centre for Economic Policy Research, Policy Insight No.68, December.
- Uhlig, Η. (2013) “Sovereign default risk and banks in Europe’s monetary union”, www.voxeu.org, 5 Σεπτεμβρίου.
- Gros, D. (2013) “Banking Union with a Sovereign Virus: The self-serving regulatory treatment of sovereign debt in the euro area”, The Centre for European Policy Studies, N.289.