The potential failure of a large bank presents vexing questions for policy-makers. It poses significant risks to other financial institutions; to the financial system as a whole; and possibly to the economic and social order. Because of such fears; policymakers in many countries - developed and less developed, democratic and autocratic - respond by protecting bank creditors from all or some of the losses they otherwise would face. Failing banks are labeled too big to fail (or TBTF). This book examines the issues surrounding TBTF, explaining why it is a problem and discussing ways of dealing with it more effectively. Gary Stern and Ron Feldman, officers with the Federal Reserve, warn that not enough has been done to reduce creditors' expectations of TBTF protection. Many of the existing pledges and policies meant to convince creditors that they will bear market loses when large banks fail are not credible, resulting in significant net costs to the economy. The authors recommend that policymakers enact a series of reforms to reduce expectations of bailouts when large banks fail.
Product Identifiers
Publisher
Brookings Institution
ISBN-13
9780815781523
eBay Product ID (ePID)
94823775
Product Key Features
Author
Ron J. Feldman, Gary H. Stern
Publication Name
Too Big to Fail: the Hazards of Bank Bailouts
Format
Hardcover
Language
English
Subject
Finance
Publication Year
2004
Type
Textbook
Number of Pages
230 Pages
Dimensions
Item Height
9mm
Item Width
6mm
Additional Product Features
Title_Author
Ron J. Feldman, Gary H. Stern
Country/Region of Manufacture
United States
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