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Home Country Versus Cross-Border Negative Externalities in Large Banking Organization Failures and How to Avoid them

In: International Financial Instability Global Banking and National Regulation

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  • Robert A. Eisenbeis

    (Federal Reserve Bank of Atlanta, USA)

Abstract

The following sections are included:IntroductionSources and Nature of Systemic RisksNegative Externalities and Banking FailuresConflicts of Interest, Agency Costs, and Bankruptcy Laws: Their Role in Affecting the Negative Externalities of Banking FailuresSummary and ConclusionsReferences

Suggested Citation

  • Robert A. Eisenbeis, 2007. "Home Country Versus Cross-Border Negative Externalities in Large Banking Organization Failures and How to Avoid them," World Scientific Book Chapters, in: Douglas D Evanoff & George G Kaufman & John R LaBrosse (ed.), International Financial Instability Global Banking and National Regulation, chapter 13, pages 181-200, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789812708731_0013
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    1. Robert A. Eisenbeis & George G. Kaufman, 2006. "Challenges for Deposit Insurance and Financial Stability in Cross-Border Banking Environments with Emphasis on the European Union," World Scientific Book Chapters, in: Gerard Caprio Jr & Douglas D Evanoff & George G Kaufman (ed.), Cross-Border Banking Regulatory Challenges, chapter 22, pages 331-347, World Scientific Publishing Co. Pte. Ltd..
    2. Kahn, Charles M. & Roberds, William, 2001. "The CLS bank: a solution to the risks of international payments settlement?," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 54(1), pages 191-226, June.
    3. George G. Kaufman, 1988. "Bank Runs: Causes, Benefits, and Costs," Cato Journal, Cato Journal, Cato Institute, vol. 7(3), pages 559-594, Winter.
    4. Gorton, Gary, 1988. "Banking Panics and Business Cycles," Oxford Economic Papers, Oxford University Press, vol. 40(4), pages 751-781, December.
    5. Allan H. Meltzer, 1998. "Asian Problems and the IMF," Cato Journal, Cato Journal, Cato Institute, vol. 17(3), pages 264-274, Winter.
    6. Oosterloo, Sander & de Haan, Jakob & Jong-A-Pin, Richard, 2007. "Financial stability reviews: A first empirical analysis," Journal of Financial Stability, Elsevier, vol. 2(4), pages 337-355, March.
    7. Fujiki, Hiroshi & Green, Edward J. & Yamazaki, Akira, 2008. "Incentive efficient risk sharing in a settlement mechanism," Journal of Economic Theory, Elsevier, vol. 142(1), pages 178-195, September.
    8. Bank for International Settlements, 2004. "Foreign direct investment in the financial sector of emerging market economies," CGFS Papers, Bank for International Settlements, number 22, October –.
    9. Bruce Champ & Bruce D. Smith & Stephen D. Williamson, 1996. "Currency Elasticity and Banking Panics: Theory and Evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 29(4), pages 828-864, November.
    10. Chang, Roberto & Velasco, Andres, 2000. "Financial Fragility and the Exchange Rate Regime," Journal of Economic Theory, Elsevier, vol. 92(1), pages 1-34, May.
    11. Roberto Chang & Andres Velasco, 1998. "Financial Crises in Emerging Markets," NBER Working Papers 6606, National Bureau of Economic Research, Inc.
    12. Craig Furfine, 2006. "The Costs and Benefits of Moral Suasion: Evidence from the Rescue of Long-Term Capital Management," The Journal of Business, University of Chicago Press, vol. 79(2), pages 593-622, March.
    13. V.V. Chari & Ravi Jagannathan, 1984. "Banking Panics," Discussion Papers 618, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    14. Schüler, Martin & Heinemann, Friedrich, 2005. "The Costs of Supervisory Fragmentation in Europe," ZEW Discussion Papers 05-01, ZEW - Leibniz Centre for European Economic Research.
    15. Edward J. Kane, 2006. "Confronting divergent interests in cross-country regulatory arrangements," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 69, pages 1-12., June.
    16. Dirk Schoenmaker & Sander Oosterloo, 2005. "Financial Supervision in an Integrating Europe: Measuring Cross‐Border Externalities," International Finance, Wiley Blackwell, vol. 8(1), pages 1-27, March.
    17. Neil Wallace, 1988. "Another attempt to explain an illiquid banking system: the Diamond and Dybvig model with sequential service taken seriously," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 12(Fall), pages 3-16.
    18. V. V. Chari, 1989. "Banking without deposit insurance or bank panics: lessons from a model of the U.S. national banking system," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 13(Sum), pages 3-19.
    19. Arnoud W. A. Boot, 2007. "Supervisory Arrangements, LOLR, and Crisis Management in a Single European Banking Market," World Scientific Book Chapters, in: Douglas D Evanoff & George G Kaufman & John R LaBrosse (ed.), International Financial Instability Global Banking and National Regulation, chapter 25, pages 387-406, World Scientific Publishing Co. Pte. Ltd..
    20. Schüler, Martin, 2003. "How Do Banking Supervisors Deal with Europe-wide Systemic Risk?," ZEW Discussion Papers 03-03, ZEW - Leibniz Centre for European Economic Research.
    21. Anna J. Schwartz, 1998. "International Financial Crises: Myths and Realities," Cato Journal, Cato Journal, Cato Institute, vol. 17(3), pages 251-256, Winter.
    22. Jacklin, Charles J & Bhattacharya, Sudipto, 1988. "Distinguishing Panics and Information-Based Bank Runs: Welfare and Policy Implications," Journal of Political Economy, University of Chicago Press, vol. 96(3), pages 568-592, June.
    23. Walter B. Wriston, 1998. "Dumb Networks and Smart Capital," Cato Journal, Cato Journal, Cato Institute, vol. 17(3), Winter.
    24. Robert A. Eisenbeis & George G. Kaufman, 2007. "Cross-border banking: challenges for deposit insurance and financial stability in the European Union," FRB Atlanta Working Paper 2006-15, Federal Reserve Bank of Atlanta.
    25. Roberto Chang & Andres Velasco, 2001. "A Model of Financial Crises in Emerging Markets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 489-517.
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    Cited by:

    1. Zuzana Brixiova & Laura Vartia & Andreas Woergoetter, 2009. "Capital Inflows, Household Debt And The Boom Bust Cycle In Estonia," William Davidson Institute Working Papers Series wp965, William Davidson Institute at the University of Michigan.
    2. Santiago Carbo-Valverde & Edward Kane & Francisco Rodriguez-Fernandez, 2008. "Evidence of Differences in the Effectiveness of Safety-Net Management in European Union Countries," Journal of Financial Services Research, Springer;Western Finance Association, vol. 34(2), pages 151-176, December.
    3. International Monetary Fund, 2008. "Cross-Border Coordination of Prudential Supervision and Deposit Guarantees," IMF Working Papers 2008/283, International Monetary Fund.
    4. Edward Kane, 2007. "Connecting National Safety Nets: The Dialectics of the Basel II Contracting Process," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(4), pages 399-409, December.
    5. Christine M. Cumming & Robert A. Eisenbeis, 2010. "Resolving troubled systemically important cross-border financial institutions: is a new corporate organizational form required?," Staff Reports 457, Federal Reserve Bank of New York.

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