Bolton, Patrick and Oehmke, Martin ORCID: 0000-0001-9902-0711 (2019) Bank resolution and the structure of global banks. Review of Financial Studies, 32 (6). 2384 – 2421. ISSN 0893-9454
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Abstract
We study the resolution of global banks by national regulators. Single-point-of-entry (SPOE) resolution, where loss-absorbing capital is shared across jurisdictions, is efficient but faces implementation constraints. First, when expected transfers across jurisdictions are too asymmetric, national regulators fail to set up SPOE resolution ex ante. Second, when required ex post transfers are too large, national regulators ring-fence assets instead of cooperating in SPOE resolution. In this case, a multiple-point-of-entry (MPOE) resolution, where loss-absorbing capital is preassigned, is more robust. Our analysis highlights a fundamental link between efficient bank resolution, the operational structures, risks, and incentives of global banks.
Item Type: | Article |
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Official URL: | https://academic.oup.com/rfs |
Additional Information: | © 2018 The Authors |
Divisions: | Finance |
Subjects: | H Social Sciences > HG Finance |
JEL classification: | G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation G - Financial Economics > G3 - Corporate Finance and Governance > G33 - Bankruptcy; Liquidation |
Date Deposited: | 21 Aug 2018 09:38 |
Last Modified: | 11 Dec 2024 21:42 |
Projects: | 714567 |
Funders: | European Research Council, Paul Woolley Centre |
URI: | http://eprints.lse.ac.uk/id/eprint/90056 |
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