學術研究

(Macro/Finance webinar) Allocating Losses: Bail-ins, Bailouts and Bank Regulation

日期 2021-02-05 (週五)
時間 09:00 AM
地點 Conference Room C103
演講者 Professor Todd Keister
演講者簡介 Professor Keister received his Ph.D. in Economics from Cornell University in 1998. He is currently a Professor of Economics at Rutgers University. His research fields are Macroeconomics; Banking and Financial Stability.
摘要 We study the interaction between a government’s bailout policy and banks’ willingness to impose losses on (or “bail in”) their investors. The government has limited commitment and may choose to bail out banks facing large losses. The anticipation of this bailout undermines a bank’s private incentive to impose a bail-in. In the resulting equilibrium, bail-ins are too small and bailouts are too large. Some banks may also face a run by informed investors, creating further distortions and leading to larger bailouts. We show how a regulator with limited information can raise welfare and improve financial stability by imposing a system-wide, mandatory bail-in at the onset of a crisis.
In some situations, allowing banks to choose between meeting a minimum bail-in and opting out can raise welfare further.