Bailout Stigma

• 成果类型: Article
• 署名作者: Che, Yeon-Koo; Choe, Chongwoo; Rhee, Keeyoung
• 署名单位: Columbia University; Monash University; Sungkyunkwan University (SKKU)
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13386
• 发表日期: 2024
• 关键词: Adverse selection; Discount window; Financial crisis; trading dynamics; MARKET; interventions; INFORMATION; RELUCTANCE; BORROW

摘要

We develop a model of bailout stigma in which accepting a bailout signals a firm's balance-sheet weakness and reduces its funding prospects. To avoid stigma, high-quality firms withdraw from subsequent financing after receiving bailouts or refuse bailouts altogether to send a favorable signal. The former leads to a short-lived stimulation followed by a market freeze even worse than if there were no bailout. The latter revives the funding market, albeit with delay, to the level achievable without any stigma and implements a constrained optimal outcome. A menu of multiple bailout programs compounds bailout stigma and exacerbates the market freeze.