IDEAS home Printed from https://ideas.repec.org/a/oup/wbrobs/v10y1995i1p53-73.html
   My bibliography  Save this article

Incentives and the Resolution of Bank Distress

Author

Listed:
  • Glaessner, Thomas
  • Mas, Ignacio

Abstract

Unlike prudential regulations that are put in place prospectively to develop banks, procedures for dealing with banks in distress are generally determined on ad hoc basis. Often the lack of clarity in the policy framework creates incentives for bank managers, shareholders, depositors, and regulators that undercut prompt resolution of financial distress. The result is often inaction, the accumulation of bad debts, and ultimately the assumption of losses by the state. This article argues that government intervention to relieve financial distress should be institutionalized in a set of regulations that forces the authorities to comply with reporting and decision-making processes. Only in this way can inherent disincentives for dealing with distress be curtailed. Copyright 1995 by Oxford University Press.

Suggested Citation

  • Glaessner, Thomas & Mas, Ignacio, 1995. "Incentives and the Resolution of Bank Distress," The World Bank Research Observer, World Bank, vol. 10(1), pages 53-73, February.
  • Handle: RePEc:oup:wbrobs:v:10:y:1995:i:1:p:53-73
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:onb:oenbwp:y::i:48:b:1 is not listed on IDEAS
    2. Ojeabulu Uyi Michael & Chigbu E. Ezeji & Ozurumba A. Benedict & Kanu Success Ikechi, 2020. "Financial Ratios as Predictors of Financial Distress: A Study on Some Select Deposit Money Banks in Nigeria (1991-2014)," International Journal of Management Science and Business Administration, Inovatus Services Ltd., vol. 6(3), pages 29-42, March.
    3. David T. Llewellyn, 2001. "A regulatory regime for financial stability," Working Papers 48, Oesterreichische Nationalbank (Austrian Central Bank).
    4. Beck, Thorsten, 2003. "The incentive-compatible design of deposit insurance and bank failure resolution : concepts and country studies," Policy Research Working Paper Series 3043, The World Bank.
    5. Martin BROWNBRIDGE, 1998. "The Causes Of Financial Distress In Local Banks In Africa And Implications For Prudential Policy," UNCTAD Discussion Papers 132, United Nations Conference on Trade and Development.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:wbrobs:v:10:y:1995:i:1:p:53-73. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/wrldbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.