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The treatment of distressed banks

Author

Listed:
  • Dewatripont, M.
  • Rochet, JC.

Abstract

This article suggests some reforms of regulatory architecture for the treatment of distressed banks. Our main recommendations are: • a special bankruptcy regime for banks should be implemented ; • strong, truly independent supervisory agencies should be established ; • the incentives of the top managers of distressed banks should not be kept unchecked ; • procyclicality of solvency regulations should be dampened by the introduction of “automatic stabilisers” ; • one should move toward centralised supervision in economic areas which are meant to be integrated.

Suggested Citation

  • Dewatripont, M. & Rochet, JC., 2009. "The treatment of distressed banks," Financial Stability Review, Banque de France, issue 13, pages 65-74, September.
    • Handle: RePEc:bfr:fisrev:2009:13:7
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    Citations

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    Cited by:

    1. Miroslav Nedelchev, 2016. "New Framework Of Banking Supervision In The European Union," Entrepreneurship, Faculty of Economics, SOUTH-WEST UNIVERSITY "NEOFIT RILSKI", BLAGOEVGRAD, vol. 4(2), pages 287-300.
    2. Michel Aglietta & Laurence Scialom, 2010. "A Systemic Approach to Financial Regulation: a European Perspective," International Economics, CEPII research center, issue 123, pages 31-65.
    3. Mälkönen, Ville & Niinimäki, J.-P., 2012. "Blanket guarantee, deposit insurance and restructuring decisions for multinational banks," Journal of Financial Stability, Elsevier, vol. 8(2), pages 84-95.
    4. Bernd Rudolph, 2010. "Die internationale Finanzkrise als Anstoß für Weiterentwicklungen im Risikocontrolling der Banken und für Reformen in der Bankregulierung," Schmalenbach Journal of Business Research, Springer, vol. 62(61), pages 122-149, January.
    5. Kox, Henk L.M. & Leeuwen, George van, 2012. "Dynamic market selection in EU business services," MPRA Paper 41016, University Library of Munich, Germany.
    6. Hertig Gerard & Lee Ruben & McCahery Joseph A., 2010. "Empowering the ECB to Supervise Banks: A Choice-Based Approach," European Company and Financial Law Review, De Gruyter, vol. 7(2), pages 171-215, January.
    7. Korte, Josef, 2013. "Catharsis - The Real Effects of Bank Insolvency and Resolution," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79938, Verein für Socialpolitik / German Economic Association.
    8. Korte, Josef, 2015. "Catharsis—The real effects of bank insolvency and resolution," Journal of Financial Stability, Elsevier, vol. 16(C), pages 213-231.
    9. Matej Marinc & Razvan Vlahu, 2011. "The Economic Perspective of Bank Bankruptcy Law," DNB Working Papers 310, Netherlands Central Bank, Research Department.
    10. Michiel Bijlsma & Jeroen Klomp & Sijmen Duineveld, 2010. "Systemic risk in the financial sector; a review and synthesis," CPB Document 210.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    11. Peixin Zhang, 2010. "Case Study of Three German Banks Stuck in the Subprime Crisis," EconomiX Working Papers 2010-20, University of Paris Nanterre, EconomiX.
    12. Michiel Bijlsma & Wim Suyker, 2008. "The credit crisis and the Dutch economy... in eight frequently asked questions," CPB Memorandum 210.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    13. Nedelchev, Miroslav, 2015. "Coordination of banking regulation in the EU," MPRA Paper 66073, University Library of Munich, Germany, revised 2015.
    14. Michel Aglietta & Laurence Scialom, 2009. "A systemic approach to financial regulation: a European perspective," Working Papers hal-04140865, HAL.

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