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Between capture and discretion - The determinants of distressed bank treatment and expected government support

Author

Listed:
  • Ignatowski, Magdalena
  • Korte, Josef
  • Werger, Charlotte

Abstract

In this paper, we analyze how sources of political influence relate to the actual regulatory treatment of distressed banks and to the expectation of bank support provided by the government. We assemble a unique dataset that links U.S. banks JEL Classification: D72, G21, G28

Suggested Citation

  • Ignatowski, Magdalena & Korte, Josef & Werger, Charlotte, 2015. "Between capture and discretion - The determinants of distressed bank treatment and expected government support," Working Paper Series 1835, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20151835
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    File URL: https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp1835.en.pdf
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    References listed on IDEAS

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    Cited by:

    1. Jussi Keppo & Josef Korte, 2018. "Risk Targeting and Policy Illusions—Evidence from the Announcement of the Volcker Rule," Management Science, INFORMS, vol. 64(1), pages 215-234, January.
    2. Casiraghi, Marco, 2020. "Bailouts, sovereign risk and bank portfolio choices," Journal of Banking & Finance, Elsevier, vol. 119(C).
    3. Adams, Renée B., 2021. "Good News for Some Banks," Working Papers 311, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    4. Papanikolaou, Nikolaos I., 2018. "To be bailed out or to be left to fail? A dynamic competing risks hazard analysis," Journal of Financial Stability, Elsevier, vol. 34(C), pages 61-85.
    5. Fraccaroli, Nicolò & Sowerbutts, Rhiannon & Whitworth, Andrew, 2020. "Does regulatory and supervisory independence affect financial stability?," Bank of England working papers 893, Bank of England.

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    More about this item

    Keywords

    bank regulation; bank sources of influence; lobbying; Prompt Corrective Action; regulatory discretion;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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