Cross-border banking needs cross-border recapitalisation mechanisms. Each mechanism, however, suffers from the financial trilemma, which is that cross-border banking, national financial autonomy and financial stability are incompatible. In this paper, we study the efficiency of different...

We design a novel test for changes in market discipline based on the relation between firm-specific risk, credit spreads, and equity returns. We use our method to analyze the evolution of bailout expectations during the recent financial crisis. We find that bailout expectations peaked in...

This article explores the effect of delays in updating prudential regulation on countries' likelihood of experiencing banking crises, and it disentangles the impact of different aspects of regulation on crisis onset. I argue that delays in revising banks' prudential regulation allow banks to...

To study whether banks retain their lessons from the experience of a severe financial crisis, we examine the effects of the systemic banking crisis of the early 1990s in three Nordic countries (Finland, Norway, and Sweden). While this crisis largely bypassed the rest of Europe, we hypothesize...

During the 2008 financial crisis, the legislators faced the challenge to sanitise the banking sectors, and in some case to remove banks from the landscape. In order to workout the toxic portfolios, the Parliaments created "bad banks". This articles analyses these so-called bad banks regarding...

Extraordinary amounts of public funds and/or assistance were made available to banks since the onset of the 2007-2008 financial crisis. Governments worldwide have launched a massive bailout package to support banks in distress. Using a probit model, this paper investigates the likelihood of...

This article explores the determinants of bank rescue packages in the European Union during the recent financial crisis. Despite the common EU framework, member states had room for manoeuvre with respect to the size and structure of bank rescue packages as well as the conditions attached to the...

This paper further examines the development of the relevant mechanisms available for bank recovery and resolution, in special consideration of the recent Bank Recovery and Resolution Directive and the SRM Regulation as one part of the current regulatory activity of the EU. The Directive requires...