unprecedentedly during the recent financial crisis, may impose indirect costs to financial stability if bailout expectations of … participants adjusted their bailout expectations in response to government interventions, undermining market discipline mechanisms …

lenders' beliefs about the probability of bailout. Events like Lehman's collapse are conceived of as ”black swan” events that … led lenders to put a positive mass on bailout probabilities that were previously assigned zero mass.Results of the … analysis include: (i) An unanticipated increase in bailout uncertainty raises interest rates, the volume of defaults in both …

Belgium in 1830 to the early 21st century. After severe crises, the National Bank of Belgium was created in 1850. The Great …

-prone securities from the financial system. By contrast, current regulation guarantees run-prone bank liabilities and instead tries to … regulate bank assets and their values. I survey how a much simpler, rule-based, liability regulation could eliminate runs and …