Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/106983
Authors: 
Ignatowski, Magdalena
Korte, Josef
Year of Publication: 
2014
Series/Report no.: 
SAFE Policy Letter 33
Abstract: 
Can a tightening of the bank resolution regime lead to more prudent bank behavior? This policy paper reviews arguments for why this could be the case and presents evidence linking changes in bank resolution regimes with bank risk-taking. The authors find that the tightening of bank resolution in the U.S. (i.e., the introduction of the Orderly Liquidation Authority) significantly decreased overall risk-taking of the most affected banks. This effect, however, does not hold for the largest and most systemically important banks - too-big-to-fail seems to be unresolved. Building on the insights from the U.S. experience, the authors derive principles for effective resolution regimes and evaluate the emerging resolution regime for Europe.
Subjects: 
risk-taking
bank resolution regimes
USA
Europe
Persistent Identifier of the first edition: 
Document Type: 
Research Report

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