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Comment on The Power of Inaction by Cornelia Woll

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  • Jensen Jason O.

    (Department of Sociology, McGill University, Room 712, Leacock Building 855 Sherbrooke Street West, Montreal, Quebec H2X 1W4, Canada)

Abstract

This comment presents three arguments. First, that while The Power of Inaction focuses on the role of banks within bailout negotiations, this framework can be gainfully expanded by considering the government side of the bailout negotiations: evidence from the U.S. and German cases suggests that the government, as well as banks, can wield the threat of inaction in a bailout negotiation. Second, that coordinated interventions were implemented in countries where the largest leading banks were weak, and vice versa. As this singularly determines the type of intervention, it leaves little room for making strong inferences on other factors. Third, that Woll’s study indicated that coordinated interventions are more cost-efficient than uncoordinated interventions. An unexplored implication is that government negotiators can gainfully persuade banks to take part in a coordinated intervention.

Suggested Citation

  • Jensen Jason O., 2016. "Comment on The Power of Inaction by Cornelia Woll," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 6(1), pages 65-78, March.
    • Handle: RePEc:bpj:aelcon:v:6:y:2016:i:1:p:65-78:n:2
    DOI: 10.1515/ael-2015-0010
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    References listed on IDEAS

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    1. Acharya, Viral V. & Yorulmazer, Tanju, 2007. "Too many to fail--An analysis of time-inconsistency in bank closure policies," Journal of Financial Intermediation, Elsevier, vol. 16(1), pages 1-31, January.
    2. Hautcoeur Pierre-Cyrille & Riva Angelo E., 2013. "What Financiers Usually Do, and What We Can Learn from History," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 3(3), pages 313-331, April.
    3. repec:hal:pseose:halshs-00846970 is not listed on IDEAS
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