Farmer, J. Doyne, Goodhart, C. A. E. and Kleinnijenhuis, Alissa M. (2021) The current bail-in design does not resolve the too-big-to-fail problem. VoxEU.
Full text not available from this repository.Abstract
Since the Great Financial Crisis, bail-in has been introduced as an approach to address too-big-to-fail and contagion risk problems. This column uses a multi-layered network model of the European financial system to study the implication of bail-in design on financial stability. It shows that early implementation of a bail-in and stronger bank recapitalisation lead to lower contagion losses. However, current bail-in design seems to be in the region of instability and the political economy of incentives makes reforms unlikely in the near future.
| Item Type: | Article |
|---|---|
| Official URL: | https://voxeu.org/ |
| Additional Information: | © 2021 The Authors |
| Divisions: | Financial Markets Group |
| Subjects: | H Social Sciences > HG Finance H Social Sciences > HC Economic History and Conditions H Social Sciences > HB Economic Theory |
| Date Deposited: | 14 Oct 2021 10:24 |
| Last Modified: | 11 Dec 2024 20:55 |
| URI: | http://eprints.lse.ac.uk/id/eprint/112433 |
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