Skip to main content
Top

2020 | OriginalPaper | Chapter

3. Analyzing Policy Options in the Resolution of Systemically Important Banks: Comparing the “Bailout” and “Bail-In” Tool in Selected Case Studies

Authors : Ewa Miklaszewska, Jan Pys

Published in: Banking and Beyond

Publisher: Springer International Publishing

Activate our intelligent search to find suitable subject content or patents.

search-config
loading …

Abstract

The global financial crisis brought an unprecedented increase in public spending, which helped to stabilize the banking sector, but in many countries changed the market structure, incentives to take risks, cost of capital and competitive conditions. The post-crisis new resolution framework was motivated by the need to limit and control public spending, but its implementation showed a mixed picture. Thus, the aim of this chapter was to compare different restructuring and resolution programs for large banks, based on selected case studies. For the bailout tool, Deutsche Bank, the ING Group and the Royal Bank of Scotland (RBS) are compared. Then, selected resolution cases led by the Single Resolution Board (SRB) and the National Resolution Authorities (NRA) are compared, with an aim to analyze how successful was the restructuring of large banks under the bailout and bail-in regimes.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

  • über 102.000 Bücher
  • über 537 Zeitschriften

aus folgenden Fachgebieten:

  • Automobil + Motoren
  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Elektrotechnik + Elektronik
  • Energie + Nachhaltigkeit
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Maschinenbau + Werkstoffe
  • Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

  • über 67.000 Bücher
  • über 340 Zeitschriften

aus folgenden Fachgebieten:

  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Versicherung + Risiko




Jetzt Wissensvorsprung sichern!

Literature
go back to reference Allen, F., E. Carletti, J. Gray, and G.M. Gulatui, eds. 2016. Filling the Gaps in Governance: The Case of Europe. Florence: European University Institute. Allen, F., E. Carletti, J. Gray, and G.M. Gulatui, eds. 2016. Filling the Gaps in Governance: The Case of Europe. Florence: European University Institute.
go back to reference Asimakopoulos, I.G. 2018. The Veneto Banks Resolution: It Shall Be Called ‘Liquidation. European Company Law Journal 15 (5): 156–162. Asimakopoulos, I.G. 2018. The Veneto Banks Resolution: It Shall Be Called ‘Liquidation. European Company Law Journal 15 (5): 156–162.
go back to reference Bank of Italy. 2018. Financial Stability Report 2, November. Bank of Italy. 2018. Financial Stability Report 2, November.
go back to reference Bernanke, B.S. 2009. The Crisis and the Policy Response. Speech at the Stamp Lecture, London School of Economics, London, England, January 13. Bernanke, B.S. 2009. The Crisis and the Policy Response. Speech at the Stamp Lecture, London School of Economics, London, England, January 13.
go back to reference Centre For European Policy Studies. 2010. Bank State Aid in the Financial Crisis—Fragmentation or Level Playing Field?, A CEPS Task Force Report, October. Centre For European Policy Studies. 2010. Bank State Aid in the Financial Crisis—Fragmentation or Level Playing Field?, A CEPS Task Force Report, October.
go back to reference Čihák, M., and E. Nier. 2012. The Need for Special Resolution Regimes for Financial Institutions—The Case of the European Union. Harvard Business Law Review 395: 396–434. Čihák, M., and E. Nier. 2012. The Need for Special Resolution Regimes for Financial Institutions—The Case of the European Union. Harvard Business Law Review 395: 396–434.
go back to reference Dewatripont, M., and X. Freixas. 2011. Bank Resolution: A Framework for the Assessment of Regulatory Intervention. Oxford Review of Economic Policy 27 (3): 411–436.CrossRef Dewatripont, M., and X. Freixas. 2011. Bank Resolution: A Framework for the Assessment of Regulatory Intervention. Oxford Review of Economic Policy 27 (3): 411–436.CrossRef
go back to reference European Commission. 2009. State Aid No N 422/2009 and N 621/2009—United Kingdom Restructuring of Royal Bank of Scotland Following Its Recapitalisation by the State and Its Participation in the Asset Protection Scheme, Brussels, 14.12.2009, C(2009)10112 Final. European Commission. 2009. State Aid No N 422/2009 and N 621/2009—United Kingdom Restructuring of Royal Bank of Scotland Following Its Recapitalisation by the State and Its Participation in the Asset Protection Scheme, Brussels, 14.12.2009, C(2009)10112 Final.
go back to reference ———. 2015. State Aid to European Banks: Returning to Viability, Competition State Aid Brief, Issue 2015–01, February. ———. 2015. State Aid to European Banks: Returning to Viability, Competition State Aid Brief, Issue 2015–01, February.
go back to reference European Parliament and of the Council. 2014. Directive 2014/59/EU of the of 15 May 2014 Establishing a Framework for the Recovery and Resolution of Credit Institutions and Investment Firms. European Parliament and of the Council. 2014. Directive 2014/59/EU of the of 15 May 2014 Establishing a Framework for the Recovery and Resolution of Credit Institutions and Investment Firms.
go back to reference Federal Reserve. 2008. Federal Reserve Actions. Federal Reserve Monetary Policy Release, March 11. Federal Reserve. 2008. Federal Reserve Actions. Federal Reserve Monetary Policy Release, March 11.
go back to reference Felkerson, J. 2011. $29,000,000,000,000: A Detailed Look at the Fed’s Bailout by Funding Facility and Recipient, Levy Economics Institute of Bard College, Working Paper No. 698. Felkerson, J. 2011. $29,000,000,000,000: A Detailed Look at the Fed’s Bailout by Funding Facility and Recipient, Levy Economics Institute of Bard College, Working Paper No. 698.
go back to reference Gerhardt, M., and R.V. Vennet. 2017. Bank Bailouts in Europe and Bank Performance. Finance Research Letters 22: 74–80.CrossRef Gerhardt, M., and R.V. Vennet. 2017. Bank Bailouts in Europe and Bank Performance. Finance Research Letters 22: 74–80.CrossRef
go back to reference Gropp, R., and L. Tonzer. 2016. State Aid and Guarantees in Europe. In The Palgrave Handbook of European Banking, ed. T. Beck and B. Casu. Palgrave Macmillan. Gropp, R., and L. Tonzer. 2016. State Aid and Guarantees in Europe. In The Palgrave Handbook of European Banking, ed. T. Beck and B. Casu. Palgrave Macmillan.
go back to reference Huertas, T. 2016. European Bank Resolution: Making it Work! CEPS Task Force Report. Huertas, T. 2016. European Bank Resolution: Making it Work! CEPS Task Force Report.
go back to reference IMF. 2019. Republic of Poland Financial Sector Assessment Program, Technical Note—Stress Testing and Systemic Risk Analysis. Country Report No. 19/120, May. IMF. 2019. Republic of Poland Financial Sector Assessment Program, Technical Note—Stress Testing and Systemic Risk Analysis. Country Report No. 19/120, May.
go back to reference Iwanicz-Drozdowska, M., ed. 2016. European Bank Restructuring During the Global Financial Crisis. Houndmills and New York: Palgrave Macmillan. Iwanicz-Drozdowska, M., ed. 2016. European Bank Restructuring During the Global Financial Crisis. Houndmills and New York: Palgrave Macmillan.
go back to reference KPMG. 2017. SRB: Contrasting Outcomes for Banks, July. KPMG. 2017. SRB: Contrasting Outcomes for Banks, July.
go back to reference Laeven, L., and F. Valencia. 2010. Resolution of Banking Crises: The Good, the Bad, and the Ugly. IMF Working Paper, WP/10/146. Laeven, L., and F. Valencia. 2010. Resolution of Banking Crises: The Good, the Bad, and the Ugly. IMF Working Paper, WP/10/146.
go back to reference Laeven, L., L. Ratnovski, and H. Tong. 2014. Bank Size and Systemic Risk. IMF Staff Discussion Note, May. Laeven, L., L. Ratnovski, and H. Tong. 2014. Bank Size and Systemic Risk. IMF Staff Discussion Note, May.
go back to reference Landier, A., and K. Ueda. 2014. The Economics of Bank Restructuring: Understanding the Options. In Financial Crises: Causes, Consequences, and Policy Response, ed. S. Claessens, M.A. Kose, L. Laeven, and F. Valencia. Washington, DC: IMF. Landier, A., and K. Ueda. 2014. The Economics of Bank Restructuring: Understanding the Options. In Financial Crises: Causes, Consequences, and Policy Response, ed. S. Claessens, M.A. Kose, L. Laeven, and F. Valencia. Washington, DC: IMF.
go back to reference Lastra, R.M., R. Ayadi, R. Olivares-Caminal, and C. Russo. 2016. The Different Legal and Operational Structures of Banking Groups in the Euro Area and Their Impact on Banks’ Resolvability. European Parliament IPOL EGOV. Lastra, R.M., R. Ayadi, R. Olivares-Caminal, and C. Russo. 2016. The Different Legal and Operational Structures of Banking Groups in the Euro Area and Their Impact on Banks’ Resolvability. European Parliament IPOL EGOV.
go back to reference Micossi, S., G. Bruzzone, and M. Cassella. 2014. Bail-in Provisions in State Aid and Resolution Procedures: Are They Consistent with Systemic Stability? CEPS Policy Paper, No. 318. Micossi, S., G. Bruzzone, and M. Cassella. 2014. Bail-in Provisions in State Aid and Resolution Procedures: Are They Consistent with Systemic Stability? CEPS Policy Paper, No. 318.
go back to reference Miklaszewska, E., and K. Kil. 2016. The Impact of 2007–2009 Crisis on the Assessment of Bank Performance: The Evidence from CEE-11 Countries. Transformations in Business & Economics 15 (2A): 459–479. Miklaszewska, E., and K. Kil. 2016. The Impact of 2007–2009 Crisis on the Assessment of Bank Performance: The Evidence from CEE-11 Countries. Transformations in Business & Economics 15 (2A): 459–479.
go back to reference ———. 2019. Skuteczność rozwiązań i mechanizmów stabilizujących banki systemowo waěne, Bank i Kredyt, No. 2. ———. 2019. Skuteczność rozwiązań i mechanizmów stabilizujących banki systemowo waěne, Bank i Kredyt, No. 2.
go back to reference Millaruelo, A., and A. del Río. 2017. The Cost of Interventions in the Financial Sector since 2008 in the EU Countries. Banco de Espana. Millaruelo, A., and A. del Río. 2017. The Cost of Interventions in the Financial Sector since 2008 in the EU Countries. Banco de Espana.
go back to reference Petitjean, M. 2013. Bank Failures and Regulation: A Critical Review. Journal of Financial Regulation and Compliance 21 (1): 16–38.CrossRef Petitjean, M. 2013. Bank Failures and Regulation: A Critical Review. Journal of Financial Regulation and Compliance 21 (1): 16–38.CrossRef
go back to reference Philippon, T., and A. Salord. 2017. Bail-ins and Bank Resolution in Europe—A Progress Report. International Center for Monetary and Banking Studies, Geneva Reports on the World Economy Special Report 4, March. Philippon, T., and A. Salord. 2017. Bail-ins and Bank Resolution in Europe—A Progress Report. International Center for Monetary and Banking Studies, Geneva Reports on the World Economy Special Report 4, March.
go back to reference ———. 2018. Annual Report and Accounts. ———. 2018. Annual Report and Accounts.
go back to reference SRB. 2016. Introduction to Resolution Planning. Luxembourg: Publications Office of the European Union. SRB. 2016. Introduction to Resolution Planning. Luxembourg: Publications Office of the European Union.
go back to reference Véron, N. 2017. Precautionary Recapitalisation: Time for a Review. European Parliament, IPOL EGOV, July. Véron, N. 2017. Precautionary Recapitalisation: Time for a Review. European Parliament, IPOL EGOV, July.
go back to reference World Bank Group. 2016a. Bank Resolution and Bail-in in the EU: Selected Case Studies Pre and Post BRRD. FinSAC, November. World Bank Group. 2016a. Bank Resolution and Bail-in in the EU: Selected Case Studies Pre and Post BRRD. FinSAC, November.
go back to reference ———. 2016b. Understanding Bank Recovery and Resolution in the EU: A Guidebook to the BRRD. FinSAC, November. ———. 2016b. Understanding Bank Recovery and Resolution in the EU: A Guidebook to the BRRD. FinSAC, November.
Metadata
Title
Analyzing Policy Options in the Resolution of Systemically Important Banks: Comparing the “Bailout” and “Bail-In” Tool in Selected Case Studies
Authors
Ewa Miklaszewska
Jan Pys
Copyright Year
2020
DOI
https://doi.org/10.1007/978-3-030-45752-5_3