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Bail-in in action

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  • Marques-Ibanez, David
  • Santilli, Gianluca
  • Scardozzi, Giulia

Abstract

In the aftermath of the European sovereign debt crisis, the question of who should bear the burden of banking crises has been a cornerstone of the new supervisory framework in Europe. We evaluate the bail-in regulation (BRRD) for bank bond holdings using a proprietary database covering holdings of all euro-denominated securities. We focus on hard-to-value bailinable bank bonds and show that banks increased their holdings of bailinable bank bonds while households and non-financial corporations reduced their holdings of bailinable bonds issued by riskier banks.

Suggested Citation

  • Marques-Ibanez, David & Santilli, Gianluca & Scardozzi, Giulia, 2024. "Bail-in in action," Economics Letters, Elsevier, vol. 241(C).
    • Handle: RePEc:eee:ecolet:v:241:y:2024:i:c:s0165176524002489
    DOI: 10.1016/j.econlet.2024.111764
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    More about this item

    Keywords

    Bail-in; Bond holdings; Bond allocation;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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