Haufler, Andreas - 2021 - Revised version, May 2021
We model a banking union of two countries whose banking sectors differ in their average probability of failure and …- visory) decision of which banks are to be shut down before they can go bankrupt, and (ii) a bailout decision of who pays for … decentralized way. In our benchmark model the two countries always agree on a centralized regulation policy. In contrast, bailout …