This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Cross-border banking: challenges for deposit insurance and financial stability in the European Union

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Robert A. Eisenbeis
George G. Kaufman

Additional information is available for the following registered author(s):

Abstract

This paper examines the implications that alternative regulatory structures may have for resolving failed banking institutions. We place our emphasis on the European Union (EU), which is both economically and financially large and has several features relating to cross-border banking in the form of direct investment that may heighten the problems we consider. We propose four principles to ensure the efficient resolution of bank failures, should they occur, with minimum, if any, credit and liquidity losses. These principles include prompt legal closure of institutions before they become economically insolvent, prompt identification of claims and assignment of losses, prompt reopening of failed institutions, and prompt recapitalizing and reprivatization of failed institutions. Finally, we propose a mechanism to put such a scheme into place quickly in the case where a cross-border banking organization seeks to take advantage of the liberal cross-border branching provisions in the single banking license available to banks in the EU. In return for the privilege of such a license, the bank agrees to be subject to a legal closure rule as a positive capital ratio established by the EU or the home country.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.frbatlanta.org/frbatlanta/filelegacydocs/wp0615a.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Federal Reserve Bank of Atlanta in its series Working Paper with number 2006-15.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: 2007
Date of revision:
Handle: RePEc:fip:fedawp:2006-15

Contact details of provider:
Postal: 1000 Peachtree St., N.E., Atlanta, Georgia 30309
Phone: 404-521-8500
Email:
Web page: http://www.frbatlanta.org/
More information through EDIRC

Order Information:
Email:

For technical questions regarding this item, or to correct its listing, contact: (Diane Rosenberger).

Related research
Keywords:

Other versions of this item:

This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Robert A. Eisenbeis & George G. Kaufman, 2005. "Bank crisis resolution and foreign-owned banks," Economic Review, Federal Reserve Bank of Atlanta, issue Q4, pages 1-18. [Downloadable!]
  2. Dirk Schoenmaker & Sander Oosterloo, 2005. "Financial Supervision in an Integrating Europe: Measuring Cross-Border Externalities," International Finance, Blackwell Publishing, vol. 8(1), pages 1-27, 07. [Downloadable!] (restricted)
    Other versions:
  3. Thomas E. Pulkkinen & Eric S. Rosengren, 1993. "Lessons from the Rhode Island banking crisis," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 3-12.
  4. Dirk Schoenmaker & Charles Goodhart, 2006. "Burden Sharing in a Banking Crisis in Europe," FMG Special Papers sp164, Financial Markets Group. [Downloadable!] (restricted)
  5. George Kaufman, 2004. "Bank regulation and foreign-owned banks," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 67, june. [Downloadable!]
  6. Armen Hovakimian & Edward J. Kane & Luc Laeven, 2002. "How Country and Safety-Net Characteristics Affect Bank Risk-Shifting," NBER Working Papers 9322, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Edward J. Kane, 1991. "Financial Regulation and Market Forces," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 127(III), pages 325-342, September. [Downloadable!]
  8. Robert A. Eisenbeis & Larry D. Wall, 2002. "Reforming deposit insurance and FDICIA," Economic Review, Federal Reserve Bank of Atlanta, issue Q1, pages 1-16. [Downloadable!]
  9. Joe Peek & Eric S. Rosengren, 1996. "The international transmission of financial shocks: the case of Japan," Working Papers 96-1, Federal Reserve Bank of Boston. [Downloadable!]
    Other versions:
  10. Mayes, D. & Vesala, J., 1998. "On the Problems of Home Country Control," Bank of Finland - Studies in Economics and Finance 20/98, Bank of Finland. Research Department..
    Other versions:
  11. Schüler, Martin, 2003. "Incentive Problems in Banking Supervision : The European Case," ZEW Discussion Papers 03-62, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  12. Mayes, David G., 2004. "Who pays for bank insolvency?," Journal of International Money and Finance, Elsevier, vol. 23(3), pages 515-551, April. [Downloadable!] (restricted)
  13. Xavier Vives, 2001. "Restructuring Financial Regulation in the European Monetary Union," Journal of Financial Services Research, Springer, vol. 19(1), pages 57-82, February. [Downloadable!] (restricted)
  14. Maximilian J. B. Hall, 2001. "How good are EU deposit insurance schemes?," Proceedings, Federal Reserve Bank of Chicago, issue May, pages 706-729.
  15. Kane, Edward J., 2003. "What kind of multinational deposit-insurance arrangements might best enhance world welfare?," Pacific-Basin Finance Journal, Elsevier, vol. 11(4), pages 413-428, September. [Downloadable!] (restricted)
  16. Giovanni Dell'Ariccia & Robert Marquez, 2001. "Competition Among Regulators," IMF Working Papers 01/73, International Monetary Fund.
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Mayes, David G & Nieto, Maria J & Wall , Larry, 2007. "Multiple safety net regulators and agency problems in the EU: is Prompt Corrective Action a partial solution?," Research Discussion Papers 7/2007, Bank of Finland. [Downloadable!]
  2. Michel Aglietta & Laurence Scialom, 2009. "A systemic approach to financial regulation: a European perspective," EconomiX Working Papers 2009-29, University of Paris West - Nanterre la Défense, EconomiX. [Downloadable!]
  3. Mayes, David G, 2009. "Early intervention and prompt corrective action in Europe," Research Discussion Papers 17/2009, Bank of Finland. [Downloadable!]
  4. Robert A. Eisenbeis, 2006. "Home country versus cross-border negative externalities in large banking organization failures and how to avoid them," Working Paper 2006-18, Federal Reserve Bank of Atlanta. [Downloadable!]
  5. Sonia Ondo-Ndong & Laurence Scialom, 2008. "Northern Rock: The anatomy of a crisis – the prudential lessons," EconomiX Working Papers 2008-23, University of Paris West - Nanterre la Défense, EconomiX. [Downloadable!]
  6. Daniel C. L. Hardy & María Nieto, 2008. "Cross-Border Coordination Of Prudential Supervision And Deposit Guarantees," IMF Working Papers 08/283, International Monetary Fund. [Downloadable!]
  7. Reinhart, Carmen & Felton, Andrew, 2008. "The First Global Financial Crisis of the 21st Century," MPRA Paper 11862, University Library of Munich, Germany. [Downloadable!]
  8. Santiago Carbo-Valverde & Edward J. Kane & Francisco Rodriguez-Fernandez, 2008. "Evidence of Differences in the Effectiveness of Safety-Net Management in European Union Countries," NBER Working Papers 13782, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  9. David G. Mayes & María J. Nieto & Larry Wall, 2008. "Multiple safety net regulators and agency problems in the EU: Is Prompt Corrective Action partly the solution?," Banco de España Working Papers 0819, Banco de España. [Downloadable!]
    Other versions:
Statistics
Access and download statistics

Did you know? IDEAS also indexes books.

This page was last updated on 2009-11-20.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.