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Bank Resolution and the Structure of Global Banks

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  • Bolton, Patrick
  • Oehmke, Martin

Abstract

We study the resolution of global banks by national regulators. Single-point-of-entry (SPOE) resolution, where loss-absorbing capital is shared across jurisdictions, isefficient but may not be implementable. First, when expected transfers across jurisdictions are too asymmetric, national regulators fail to set up SPOE resolution ex ante. Second, when required ex-post transfers are too large, national regulators ring-fence assets instead of cooperating in SPOE resolution. In this case, a multiple-point-of-entry (MPOE) resolution, where loss-absorbing capital is pre-assigned, is more robust. Our analysis highlights a fundamental link between efficient bank resolution and the operational structures and risks of global banks.

Suggested Citation

  • Bolton, Patrick & Oehmke, Martin, 2018. "Bank Resolution and the Structure of Global Banks," CEPR Discussion Papers 13032, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:13032
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    References listed on IDEAS

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    Cited by:

    1. Thomas Conlon & John Cotter, 2015. "Subordinate Resolution - An Empirical Analysis of European Union Subsidiary Banks," Working Papers 201501, Geary Institute, University College Dublin.
    2. Anatoli Segura & Sergio Vicente, 2019. "Bank resolution and public backstop in an asymmetric banking union," Temi di discussione (Economic working papers) 1212, Bank of Italy, Economic Research and International Relations Area.
    3. repec:bla:jcmkts:v:57:y:2019:i:4:p:857-876 is not listed on IDEAS

    More about this item

    Keywords

    bank resolution; single point of entry;

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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