Information Management in Banking Crises

Tools

Shapiro, Joel and Skeie, David R. (2015) Information Management in Banking Crises. Review of Financial Studies, 28 (8). pp. 2322-2363.

This is the latest version of this item.

Official URL: http://dx.doi.org/10.1093/rfs/hhv010

Abstract

A regulator resolving a bank faces two audiences: depositors, who may run if they believe the regulator will not provide capital, and banks, which may take excess risk if they believe the regulator will provide capital. When the regulator's cost of injecting capital is private information, it manages expectations by using costly signals: (1) a regulator with a low cost of injecting capital may forbear on bad banks to signal toughness and reduce risk taking, and (2) a regulator with a high cost of injecting capital may bail out bad banks to increase confidence and prevent runs.

Item Type:	Article
Keywords:	bank regulation, financial crisis, reputation, sovereign debt crisis, stress tests, finance
Subject(s):	Finance
Date Deposited:	30 Sep 2015 13:08
Last Modified:	07 Nov 2018 16:52
URI:	http://eureka.sbs.ox.ac.uk/id/eprint/5510

Available Versions of this Item

Information Management in Banking Crises. (deposited 17 Sep 2014 10:28)
- Information Management in Banking Crises. (deposited 30 Sep 2015 13:08) [Currently Displayed]

Actions (login required)

Edit View