Released on 2004-02-29Categories Business & Economics

Too Big to Fail

Too Big to Fail

Author: Gary H. Stern

Publisher: Brookings Institution Press

ISBN: 9780815796367

Category: Business & Economics

Page: 230

View: 242

The potential failure of a large bank presents vexing questions for policymakers. It poses significant risks to other financial institutions, to the financial system as a whole, and possibly to the economic and social order. Because of such fears, policymakers in many countries—developed and less developed, democratic and autocratic—respond by protecting bank creditors from all or some of the losses they otherwise would face. Failing banks are labeled "too big to fail" (or TBTF). This important new book examines the issues surrounding TBTF, explaining why it is a problem and discussing ways of dealing with it more effectively. Gary Stern and Ron Feldman, officers with the Federal Reserve, warn that not enough has been done to reduce creditors' expectations of TBTF protection. Many of the existing pledges and policies meant to convince creditors that they will bear market losses when large banks fail are not credible, resulting in significant net costs to the economy. The authors recommend that policymakers enact a series of reforms to reduce expectations of bailouts when large banks fail.
Released on 2021-06-28Categories Business & Economics

Too-Big-to-Fail in Banking

Too-Big-to-Fail in Banking

Author: Tom Filip Lesche

Publisher: Springer Nature

ISBN: 9783658341824

Category: Business & Economics

Page: 248

View: 685

This book provides a comprehensive summary of the latest academic research on the important topic of too-big-to-fail (TBTF) in banking. It explains TBTF from various perspectives including the range of regulatory measures proposed to counter TBTF, most notably the globally accepted regulation of global-systemically important banks (G-SIBs) and its main tool of capital surcharges. The empirical analysis quantifies the shareholder value of the G-SIB attribution by using quarterly observations from more than 750 global banks between Q2 2008 and Q3 2015. The main finding is that G-SIBs are confronted with a substantial relative valuation discount compared to non-G-SIBs. From the end of 2011 until the end of 2015, a stable discount of 0.6x–0.8x price-to-tangible common equity (P/TCE) is statistically highly significant. The results suggest that the G-SIB designation effect, which positively impacts G-SIBs’ share prices because of funding benefits from IGGs, is dominated by the regulatory G-SIB burden effect, which negatively impacts G-SIBs’ share prices because of lower profitability due to capital surcharges and other regulatory requirements placed on G-SIBs. The findings re-open the debate about whether breaking up G-SIBs would unlock shareholder value and whether G-SIBs are regulated efficiently.
Released on 2011Categories Bank failures

Has Dodd-Frank Ended Too Big to Fail?

Has Dodd-Frank Ended Too Big to Fail?

Author: United States. Congress. House. Committee on Oversight and Government Reform. Subcommittee on TARP, Financial Services, and Bailouts of Public and Private Programs

Publisher:

ISBN: UCSD:31822038349726

Category: Bank failures

Page: 99

View: 587

Released on 1991Categories Bank failures

Economic Implications of the "too Big to Fail" Policy

Economic Implications of the

Author: United States. Congress. House. Committee on Banking, Finance, and Urban Affairs. Subcommittee on Economic Stabilization

Publisher:

ISBN: PSU:000018476545

Category: Bank failures

Page: 249

View: 438

Distributed to some depository libraries in microfiche.
Released on 2013-10-18Categories Business & Economics

Social Value Of The Financial Sector, The: Too Big To Fail Or Just Too Big?

Social Value Of The Financial Sector, The: Too Big To Fail Or Just Too Big?

Author: Viral V Acharya

Publisher: World Scientific

ISBN: 9789814520300

Category: Business & Economics

Page: 536

View: 276

As a result of the recent financial crisis, there has been significant public debate on the role of the financial sector in bringing about the “Great Depression.” More generally, there has been debate about whether the current industry structure has enhanced social welfare or served a detrimental role.This book is a collection of papers presented at the conference held at the Federal Reserve Bank of Chicago, in November 2012 that examined the social value of the financial sector as currently structured. Issues evaluated include what are the perceived benefits and costs of the current financial system? How valuable have industry innovations been for society? Should regulation be used to “move” the industry in a direction thought to be more valuable for society? Should “big” banks be broken up? What are the welfare implications of the current industry structure? In the book, leading industry scholars debate these issues with a goal of influencing public policy toward the industry.
Released on 2010-09-07Categories Business & Economics

Too Big to Fail

Too Big to Fail

Author: Andrew Ross Sorkin

Publisher: Penguin

ISBN: 9781101443248

Category: Business & Economics

Page: 640

View: 743

Brand New for 2018: an updated edition featuring a new afterword to mark the 10th anniversary of the financial crisis The brilliantly reported New York Times bestseller that goes behind the scenes of the financial crisis on Wall Street and in Washington to give the definitive account of the crisis, the basis for the HBO film “Too Big To Fail is too good to put down. . . . It is the story of the actors in the most extraordinary financial spectacle in 80 years, and it is told brilliantly.” —The Economist In one of the most gripping financial narratives in decades, Andrew Ross Sorkin—a New York Times columnist and one of the country's most respected financial reporters—delivers the first definitive blow-by-blow account of the epochal economic crisis that brought the world to the brink. Through unprecedented access to the players involved, he re-creates all the drama and turmoil of these turbulent days, revealing never-before-disclosed details and recounting how, motivated as often by ego and greed as by fear and self-preservation, the most powerful men and women in finance and politics decided the fate of the world's economy.
Released on 2018-06-07Categories Business & Economics

The Fed and Lehman Brothers

The Fed and Lehman Brothers

Author: Laurence M. Ball

Publisher: Cambridge University Press

ISBN: 9781108372862

Category: Business & Economics

Page:

View: 794

The bankruptcy of the investment bank Lehman Brothers was the pivotal event of the 2008 financial crisis and the Great Recession that followed. Ever since the bankruptcy, there has been heated debate about why the Federal Reserve did not rescue Lehman in the same way it rescued other financial institutions, such as Bear Stearns and AIG. The Fed's leaders from that time, especially former Chairman Ben Bernanke, have strongly asserted that they lacked the legal authority to save Lehman because it did not have adequate collateral for the loan it needed to survive. Based on a meticulous four-year study of the Lehman case, The Fed and Lehman Brothers debunks the official narrative of the crisis. It shows that in reality, the Fed could have rescued Lehman but officials chose not to because of political pressures and because they underestimated the damage that the bankruptcy would do to the economy. The compelling story of the Lehman collapse will interest anyone who cares about what caused the financial crisis, whether the leaders of the Federal Reserve have given accurate accounts of their actions, and how the Fed can prevent future financial disasters.