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Discussion Paper Series 2: Banking and Financial Studies, Deutsche Bundesbank >

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dc.contributor.authorDam, Lammertjanen_US
dc.contributor.authorKoetter, Michaelen_US
dc.date.accessioned2011-09-02en_US
dc.date.accessioned2011-09-29T15:46:15Z-
dc.date.available2011-09-29T15:46:15Z-
dc.date.issued2011en_US
dc.identifier.isbn978-3-86558-735-0en_US
dc.identifier.urihttp://hdl.handle.net/10419/50000-
dc.description.abstractTo test if safety nets create moral hazard in the banking industry, we develop a simultaneous structural two-equations model that specifies the probability of a bailout and banks' risk taking.We identify the effect of expected bailout probabilities on risk taking using exclusion restrictions based on regional political, supervisor, and banking market traits. The sample includes all observed capital preservation measures and distressed exits in the German banking industry during 1995-2006. The marginal effect of risk with respect to bailout expectations is 7.2 basis points. A change of bailout expectations by two standard deviations increases the probability of official distress from 6.2% to 9.9%. Only interventions directly targeting bank management and, to a lesser extent, penalties mitigate moral hazard. Weak interventions, such as warnings, do not reduce moral hazard.en_US
dc.language.isoengen_US
dc.publisherDeutsche Bundesbank Frankfurt am Mainen_US
dc.relation.ispartofseriesDiscussion Paper Series 2: Banking and Financial Studies 2011,10en_US
dc.subject.jelC30en_US
dc.subject.jelC78en_US
dc.subject.jelG21en_US
dc.subject.jelG28en_US
dc.subject.jelL51en_US
dc.subject.ddc330en_US
dc.subject.keywordBankingen_US
dc.subject.keywordsupervisionen_US
dc.subject.keywordmoral hazarden_US
dc.subject.keywordinterventionen_US
dc.subject.keywordbailoutsen_US
dc.subject.stwBankrisikoen_US
dc.subject.stwSchuldenübernahmeen_US
dc.subject.stwMoral Hazarden_US
dc.subject.stwBankenaufsichten_US
dc.subject.stwSchätzungen_US
dc.subject.stwDeutschlanden_US
dc.titleBank bailouts, interventions, and moral hazarden_US
dc.typeWorking Paperen_US
dc.identifier.ppn667625526en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
dc.identifier.repecRePEc:zbw:bubdp2:201110-
Appears in Collections:Discussion Paper Series 2: Banking and Financial Studies, Deutsche Bundesbank

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