Too Big to Fail and Too Big to Save: Dilemmas for Banking Reform

@article{Barth2016TooBT,
  title={Too Big to Fail and Too Big to Save: Dilemmas for Banking Reform},
  author={James R. Barth and Clas Wihlborg},
  journal={National Institute Economic Review},
  year={2016},
  volume={235},
  pages={R27 - R39}
}
‘Too big to fail’ traditionally refers to a bank that is perceived to generate unacceptable risk to the banking system and indirectly to the economy as a whole if it were to default and be unable to fulfill its obligations. Such a bank generally has substantial liabilities to other banks through the payment system and other financial links, which can be sources of ‘contagion’ if a bank fails. The main objectives in this paper are to identify the different dimensions of too big to fail and… 
Methods for alleviating the problem of Too big to fail in Germany
As a result of the last financial crisis, the problem of Too big to fail (TBTF) escalated in many countries, among which in Germany. The complexity and volume of the investment activity run by many
Too Big to Fail: Measures, Remedies, and Consequences for Efficiency and Stability
This paper evaluates whether reform efforts addressing “too big to fail” actually enhance the stability of the financial system, and whether trade-offs exist between stability and efficiency. We also
The Contribution of Large Banking Institutions to Systemic Risk: What Do We Know? A Literature Review
Against the background of the global financial crisis, we review recent literature on the debate about “too big to fail”. This is (still) one of the key issues in banking literature since it
The Contribution of Large Banking Institutions to Systemic Risk: What Do We Know? A Literature Review
Abstract Against the background of the global financial crisis, we review recent literature on the debate about “too big to fail”. This is (still) one of the key issues in banking literature since it
Internationalization, Foreign Complexity and Systemic Risk: Evidence from European Banks
Abstract Using a novel cross-European dataset on bank internationalization, the paper accounts for organizational and geographic complexity and evaluates its impact on systemic risk and how both the
Complex financial institutions and systemic risk
The objective of this paper is to identify the bank organizational structures that generate substantial systemic risk and to explain why banks have incentives for creating them. We seek the
On the Origin of Financial Crises and the Survival of the Unfittest
The risk of financial crisis fuelled by 'inflated ratings' is recognised but underestimated. Firstly, the manufacturing of inflated ratings is not fully within the control of credit rating agencies
Bad or good neighbours: a spatial financial contagion study
Purpose The purpose of this paper is to study the evolution of financial contagion between Eurozone banks, observing the credit default swaps (CDSs) market during the period 2009–2017.
Macroprudential Supervision: From Theory to Policy
Financial supervision focuses on the aggregate (macroprudential) in addition to the individual (microprudential). But an agreed framework for measuring and addressing financial imbalances is lacking.
...
...

References

SHOWING 1-10 OF 62 REFERENCES
Too Big to Fail in Financial Crisis: Motives, Countermeasures, and Prospects
Regulatory forbearance and government financial support for the largest U.S. financial companies during the crisis of 2007–09 highlighted a "too big to fail" problem that has existed for decades. As
Too Many to Fail? Evidence of Regulatory Forbearance when the Banking Sector is Weak
This article studies bank failures in twenty-one emerging market countries in the 1990s. By using a competing risk hazard model for bank survival, we show that a government is less likely to take
Are banks too big to fail
Abstract We consider three measures on the systemic importance of a financial institu- tion within a interconnected financial system. Based on the measures, we study the relation between the size of
The Governance of 'Too Big to Fail' Banks
This paper considers possible and proposed responses to the “To Big (complex, interconnected, important) To Fail (TBTF) Problem.” It argues that the corporate governance of large shareholder-owned
Corporate Structures, Transparency and Resolvability of Global Systemically Important Banks
Before the global 2008 financial crisis, most officials appeared not to have anticipated the problems that would need to be addressed if a large cross-border bank should need to be resolved. During
Just how big is the too-big-to-fail problem?
The idea of banks too big to fail (TBTF) is not new. Indeed, it has been three decades since the first TBTF bailout owing to concerns about serious and widespread financial repercussions. Since then,
In Banking, is Small Beautiful?
The state-led resolution of the 2007-2009 financial crisis has proven to be costly. Calls are being heard in Belgium, the Netherlands and Switzerland to cap the size of domestic banks. Is small
How to Design a Contingent Convertible Debt Requirement that Helps Solve Our Too‐Big‐To‐Fail Problem
As bank regulatory reform tries to come to grips with the lessons of the financial crisis, several experts have proposed that some form of contingent convertible debt (CoCo) requirement be added to
Financial Architecture, Systemic Risk, and Universal Banking
Consolidation has been a fact of life in the wholesale financial services sector, resulting in fundamental change in the financial architecture and public exposure to systemic risk. The underlying
Living wills and cross-border resolution of systemically important banks
Purpose – The purpose of this paper is to analyze whether and how “living wills” and public disclosure of such resolution plans contribute to market discipline and the effective resolution of too big
...
...