The German Bank Restructuring Act: An Economic Perspective
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Berkeley: Berkeley Electronic Press, 2011. (German Working Papers in Law and Economics; No. 16).
Research output: Working paper › Working papers
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TY - UNPB
T1 - The German Bank Restructuring Act: An Economic Perspective
AU - von Müller, Camillo
PY - 2011
Y1 - 2011
N2 - The paper explores incentives created by the German Bank Restructuring Act for investors holding assets in systemically important banks (SIBs). Its purpose is to examine consequences that follow for risk choices of SIBs, as well as for Germany’s financial system. Applying the analytical model of Stigliz (1990) the study reinforces the view that regulators can induce SIBs to forego risks by curbing promises of systemic support. Adverse consequences result from the fact that the BankRestructuring Act is affecting different groups of SIB-investors heterogeneously. This leads to macro-effects that bear potentials to offset risk reductions achieved on the micro level.
AB - The paper explores incentives created by the German Bank Restructuring Act for investors holding assets in systemically important banks (SIBs). Its purpose is to examine consequences that follow for risk choices of SIBs, as well as for Germany’s financial system. Applying the analytical model of Stigliz (1990) the study reinforces the view that regulators can induce SIBs to forego risks by curbing promises of systemic support. Adverse consequences result from the fact that the BankRestructuring Act is affecting different groups of SIB-investors heterogeneously. This leads to macro-effects that bear potentials to offset risk reductions achieved on the micro level.
KW - Economics
KW - Bailout Guarantees
KW - Banking Act
KW - Bank Reorganization Act
KW - Bank Restructuring Act
KW - Bank Restructuring Fund Act
KW - Financial Markets
KW - Risk
KW - Systemically Important Institutions
M3 - Working papers
T3 - German Working Papers in Law and Economics
BT - The German Bank Restructuring Act: An Economic Perspective
PB - Berkeley Electronic Press
CY - Berkeley
ER -