Bank Bailouts, International Linkages, and Cooperation

• 成果类型: Article
• 署名作者: Niepmann, Friederike; Schmidt-Eisenlohr, Tim
• 署名单位: University of Oxford
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.5.4.270
• 发表日期: 2013
• 页码: 270-305
• 关键词: deposit insurance; moral hazard; liquidity; runs; contagion; games

摘要

Financial institutions are increasingly linked internationally. As a result, financial crises and government intervention have stronger effects beyond borders. We provide a model of international contagion allowing for bank bailouts. While a social planner trades off tax distortions, liquidation losses, and intra- and intercountry income inequality, in the noncooperative game between governments there are inefficiencies due to externalities, a lack of burden sharing, and free riding. We show that, in absence of cooperation, stronger interbank linkages make government interests diverge, whereas cross-border asset holdings tend to align them. We analyze different forms of cooperation and their effects on global and national welfare.