Abstract
We model a banking union of two countries whose banking sectors di↵er in their average probability of failure and externalities between the two countries arise from cross-border bank ownership. The two countries face (i) a regulatory (supervisory) decision of which banks are to be shut down before they can go bankrupt, and (ii) a bailout decision of who pays for banks that have failed despite regulatory oversight. Each of these choices can either be taken in a centralized or in a decentralized way. In our benchmark model the two countries always agree on a centralized regulation policy. In contrast, bailout policies are centralized only when international spillovers from cross-border bank ownership are strong, and banking sectors are highly profitable
Dokumententyp: | Paper |
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Keywords: | banking union, bank regulation, bailout policies |
Fakultät: | Volkswirtschaft
Volkswirtschaft > Collaborative Research Center Transregio "Rationality and Competition" |
Themengebiete: | 300 Sozialwissenschaften > 330 Wirtschaft |
JEL Classification: | G28, F33, H87 |
URN: | urn:nbn:de:bvb:19-epub-77856-5 |
Sprache: | Englisch |
Dokumenten ID: | 77856 |
Datum der Veröffentlichung auf Open Access LMU: | 16. Nov. 2021, 13:06 |
Letzte Änderungen: | 16. Nov. 2021, 13:06 |