September 2000 - Certain measures add greatly to the fiscal cost of banking crises: unlimited deposit guarantees, open … costly in terms of forgone economic output. Many different policy recommendations have been made for limiting the cost of …

charters from episodes of financial distress, and they also have an incentive to increase risk to exploit the cost … relationship to size requires untangling cost and profit from decisions about risk versus expected return because both cost and … higher levels of risk-taking. Studies of commercial banking cost that ignore endogenous risk-taking find little evidence of …