Optimal Forbearance of Bank Resolution

• 成果类型: Article
• 署名作者: Schilling, Linda M.
• 署名单位: Washington University (WUSTL); Washington University (WUSTL)
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13273
• 发表日期: 2023
• 页码: 3621-3675
• 关键词: coordination; runs

摘要

This paper analyzes a regulator's optimal strategic delay of resolving banks when the regulator's announcement of the intervention delay endogenously affects the depositors' run propensity. Given intervention, the regulator either liquidates the remaining illiquid assets (prompt corrective action) or continues managing the assets at a reduced skill level (resolution under receivership). In either case, I show that if the regulator tolerates fewer withdrawals until intervention, the depositors may react by preempting the regulator: they run on the bank more often ex ante. A policy of never intervening can leave the bank more stable than a conservative intervention policy.