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Assessing Large Financial Firm Resolvability

Author

Listed:
  • Haltom, Renee Courtois

    (Federal Reserve Bank of Richmond)

  • Jarque, Arantxa

    (Federal Reserve Bank of Richmond)

  • Walter, John R.

    (Federal Reserve Bank of Richmond)

Abstract

A large financial institution may be said to be "resolvable" if, in the event of failure, policymakers would allow it to go through bankruptcy without financial assistance from the government. The choice between bankruptcy or bailout trades off different sets of costs on the economy. This Economic Brief presents a new tool that could assist policymakers with this evaluation, potentially helping to curb the "too big to fail" problem, serving as a useful complement to the "living wills" process, and making the resolution process more transparent.

Suggested Citation

  • Haltom, Renee Courtois & Jarque, Arantxa & Walter, John R., 2018. "Assessing Large Financial Firm Resolvability," Richmond Fed Economic Brief, Federal Reserve Bank of Richmond, issue June, pages 1-9.
  • Handle: RePEc:fip:fedreb:00065
    as

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    File URL: https://www.richmondfed.org/-/media/richmondfedorg/publications/research/economic_brief/2018/pdf/eb_18-06.pdf
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