How credible is a too-big-to-fail policy?: International evidence from market discipline
2013
This paper analyzes in an international sample of banks from 104 countries if the
sensitivity of the cost of deposits to bank risk varies across banks depending on their
systemic and absolute size. We analyze a period before the 2007 financial crisis and
control for endogeneity of bank size, intervention policies in past banking crises, and
soundness of countries� public finances. Our results are consistent with the
predominance of the too-big-to-fail hypothesis, although this effect is stronger in
countries that have not suffered a banking crisis, not imposed losses on depositors in
crises, and countries with sounder public finances.
Keywords:
- Correction
- Source
- Cite
- Save
- Machine Reading By IdeaReader
0
References
0
Citations
NaN
KQI