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Bank bailouts, international linkages and cooperation

Friederike Niepmann; Tim Schmidt-Eisenlohr

Financial institutions are increasingly linked internationally. As a result, financial crisis and government intervention have stronger effects beyond borders. We provide a model of international contagion allowing for bank bailouts. While a social planner trades off tax distortions, liquidation los... Full description

Year of Publication: 2011
Authors: Niepmann, Friederike; Schmidt-Eisenlohr, Tim
Publisher: München : CESifo
Physical Description: Online-Ressource (PDF-Datei: 40 S., 370 KB)
graph. Darst.
Series: CESifo working paper / MONETARY POLICY AND INTERNATIONAL FINANCE ; 3384
Language: English
Subjects: Finanzkrise | Financial crisis | Bankenkrise | Banking crisis | Schuldenübernahme | Bailout | Ansteckungseffekt | Contagion | Internationale Wirtschaftspolitik | International economic policy
Classification: jel-F360; jel-F420; jel-G010; jel-G280
Genres: Arbeitspapier
Working Paper
Graue Literatur
Non-commercial literature
Type of Publication (narrower categories): Book / Working Paper
Notes: Systemvoraussetzungen: Acrobat Reader
Parallel als Druckausg. erschienen
Title record from database: ECONIS - Online Catalogue of the ZBW
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Summary: Financial institutions are increasingly linked internationally. As a result, financial crisis and government intervention have stronger effects beyond borders. We provide a model of international contagion allowing for bank bailouts. While a social planner trades off tax distortions, liquidation losses and intra- and inter-country income inequality, in the non-cooperative game between governments there are inefficiencies due to externalities, no burden sharing and free-riding. We show that, in absence of cooperation, stronger interbank linkages make government interests diverge, whereas cross-border asset holdings tend to align them. We analyze different forms of cooperation and their effects on global and national welfare. -- bailout ; contagion ; financial crisis ; international institutional arrangements
Item Description: Systemvoraussetzungen: Acrobat Reader
Parallel als Druckausg. erschienen
Physical Description: Online-Ressource (PDF-Datei: 40 S., 370 KB)
graph. Darst.

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