Too Many to Fail? Evidence of Regulatory Forbearance When the Banking Sector Is Weak

• 成果类型: Article
• 署名作者: Brown, Craig O.; Dinc, I. Serdar
• 署名单位: City University of New York (CUNY) System; Baruch College (CUNY); Massachusetts Institute of Technology (MIT)
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhp039
• 发表日期: 2011
• 页码: 1378
• 关键词: market discipline; Deposit insurance; contagion; bankruptcy; distress; duration; models; CHOICE; credit

摘要

This article studies bank failures in twenty-one emerging market countries in the 1990s. By using a competing risk hazard model for bank survival, we show that a government is less likely to take over or close a failing bank if the banking system is weak. This Too-Many-to-Fail effect is robust to controlling for macroeconomic factors, financial crises, the Too-Big-to-Fail effect, domestic financial development, and concerns due to systemic risk and information spillovers. The article also shows that the Too-Many-to-Fail effect is stronger for larger banks and when there is a large government budget deficit. (JEL E58, F30, G21, G28)