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Are Banks Finally Resolvable? A Perspective from Europe

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  • ISABEL SCHNABEL

Abstract

After the global financial crisis, policymakers in many countries promised that banks should never again be bailed out using taxpayers’ money. Therefore, new regulatory measures were introduced, most importantly new bank resolution regimes like the Single Resolution Mechanism in the euro area. This paper shows that these measures contributed to a reduction in bail‐out expectations and a return of market discipline in Europe. But European banks are still far from being truly resolvable. More remains to be done.

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  • Isabel Schnabel, 2020. "Are Banks Finally Resolvable? A Perspective from Europe," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 52(S1), pages 77-86, October.
    • Handle: RePEc:wly:jmoncb:v:52:y:2020:i:s1:p:77-86
    DOI: 10.1111/jmcb.12734
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    References listed on IDEAS

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    1. Beck, Thorsten & Radev, Dayen & Schnabel, Isabel, 2020. "Bank Resolution Regimes and Systemic Risk," CEPR Discussion Papers 14724, C.E.P.R. Discussion Papers.
    2. Alexander Schäfer & Isabel Schnabel & Beatrice Weder di Mauro, 2016. "Financial Sector Reform after the Subprime Crisis: Has Anything Happened?," Review of Finance, European Finance Association, vol. 20(1), pages 77-125.
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    Cited by:

    1. Małgorzata Iwanicz-Drozdowska & Krzysztof Jackowicz & Maciej Karczmarczyk, 2021. "“The Crooked Smile of TCR†: Banks’ Solvency and Restructuring Costs in the European Banking Industry," SAGE Open, , vol. 11(3), pages 21582440211, September.
    2. Giuliana, Raffaele, 2022. "Fluctuating bail-in expectations and effects on market discipline, risk-taking and cost of capital," ESRB Working Paper Series 133, European Systemic Risk Board.
    3. Martien Lamers & Thomas Present & Nicolas Soenen & Rudi Vander Vennet, 2023. "Does BRRD mitigate the bank-to-sovereign risk channel?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 23/1060, Ghent University, Faculty of Economics and Business Administration.

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