Bailouts and Systemic Insurance is popular PDF and ePub book, written by Mr.Giovanni Dell'Ariccia in 2013-11-12, it is a fantastic choice for those who relish reading online the Business & Economics genre. Let's immerse ourselves in this engaging Business & Economics book by exploring the summary and details provided below. Remember, Bailouts and Systemic Insurance can be Read Online from any device for your convenience.
Bailouts and Systemic Insurance Book PDF Summary
We revisit the link between bailouts and bank risk taking. The expectation of government support to failing banks creates moral hazard—increases bank risk taking. However, when a bank’s success depends on both its effort and the overall stability of the banking system, a government’s commitment to shield banks from contagion may increase their incentives to invest prudently and so reduce bank risk taking. This systemic insurance effect will be relatively more important when bailout rents are low and the risk of contagion (upon a bank failure) is high. The optimal policy may then be not to try to avoid bailouts, but to make them “effective”: associated with lower rents.
Detail Book of Bailouts and Systemic Insurance PDF
- Author : Mr.Giovanni Dell'Ariccia
- Release : 12 November 2013
- Publisher : International Monetary Fund
- ISBN : 9781475519631
- Genre : Business & Economics
- Total Page : 28 pages
- Language : English
- PDF File Size : 11,7 Mb
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