IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/2003-017.html
   My bibliography  Save this paper

What Happens After Supervisory Intervention? Considering Bank Closure Options

Author

Listed:
  • Mr. Mats A Josefsson
  • Mr. Michael Andrews

Abstract

Closures have been used to resolve problem banks in many countries in a wide range of economic circumstances, yet banking supervisors frequently defer intervention and closure. Avoiding the costs of disruption is the principal argument in favor of extraordinary measures, such as the use of public funds for recapitalization or forbearance, as alternatives to closing insolvent banks. Well-planned and implemented closure options can preserve essential functions performed by failing banks, mitigating disruption. Extraordinary measures to avoid closure should generally be avoided, but may be used in a systemic crisis to preserve some portion of a widely insolvent banking sector.

Suggested Citation

  • Mr. Mats A Josefsson & Mr. Michael Andrews, 2003. "What Happens After Supervisory Intervention? Considering Bank Closure Options," IMF Working Papers 2003/017, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:2003/017
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=16222
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gerard Caprio & Patrick Honohan, 2008. "Banking Crises," Center for Development Economics 2008-09, Department of Economics, Williams College.
    2. Mr. Tamim Bayoumi & Mr. Paul R Masson, 1998. "Market-Based Policy Instruments for Systemic Bank Restructuring," IMF Working Papers 1998/113, International Monetary Fund.
    3. International Monetary Fund, 1999. "Recapitalizing Banks with Public Funds: Selected Issues," IMF Working Papers 1999/139, International Monetary Fund.
    4. Paul Hoffman & Anthony M. Santomero, 1998. "Problem Bank Resolution: Evaluating the Options," Center for Financial Institutions Working Papers 98-05, Wharton School Center for Financial Institutions, University of Pennsylvania.
    5. Mr. Edward J Frydl, 1999. "The Length and Cost of Banking Crises," IMF Working Papers 1999/030, International Monetary Fund.
    6. George Soros, 1999. "The International Financial Crisis," Challenge, Taylor & Francis Journals, vol. 42(2), pages 58-76, March.
    7. Mr. Dong He, 2000. "Emergency Liquidity Support Facilities," IMF Working Papers 2000/079, International Monetary Fund.
    8. Ms. G. G. Garcia, 1999. "Deposit Insurance: A Survey of Actual and Best Practices," IMF Working Papers 1999/054, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Harrison, Ian & Anderson, Steve & Twaddle, James, 2007. "Pre-positioning for effective resolution of bank failures," Journal of Financial Stability, Elsevier, vol. 3(4), pages 324-341, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Georges Dionne, 2003. "The Foundationsof Banks' Risk Regulation: A Review of Literature," THEMA Working Papers 2003-46, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    2. International Monetary Fund, 2006. "Panama: Selected Issues and Statistical Appendix," IMF Staff Country Reports 2006/026, International Monetary Fund.
    3. Davide Furceri & Aleksandra Zdzienicka, 2012. "The Consequences of Banking Crises for Public Debt," International Finance, Wiley Blackwell, vol. 15(3), pages 289-307, December.
    4. Reinhart, Carmen M. & Rogoff, Kenneth S., 2013. "Banking crises: An equal opportunity menace," Journal of Banking & Finance, Elsevier, vol. 37(11), pages 4557-4573.
    5. Barry Eichengreen and Carlos Arteta., 2000. "Banking Crises in Emerging Markets: Presumptions and Evidence," Center for International and Development Economics Research (CIDER) Working Papers C00-115, University of California at Berkeley.
    6. Bumba Mukherjee & Benjamin E. Bagozzi, 2013. "The IMF, Domestic Public Sector Banks, and Currency Crises in Developing States," International Interactions, Taylor & Francis Journals, vol. 39(1), pages 1-29, January.
    7. Gary Gorton & Lixin Huang, 2004. "Liquidity, Efficiency, and Bank Bailouts," American Economic Review, American Economic Association, vol. 94(3), pages 455-483, June.
    8. Patrick Honohan & Daniela Klingebiel, 2000. "Controlling fiscal costs of banking crises," Proceedings 682, Federal Reserve Bank of Chicago.
    9. Demirgüç-Kunt, Asli & Kane, Edward J. & Laeven, Luc, 2008. "Determinants of deposit-insurance adoption and design," Journal of Financial Intermediation, Elsevier, vol. 17(3), pages 407-438, July.
    10. Schou-Zibell, Lotte & Albert, Jose Ramon & Song, Lei Lei, 2010. "A Macroprudential Framework for Monitoring and Examining Financial Soundness," Working Papers on Regional Economic Integration 43, Asian Development Bank.
    11. Elke Hanschel & Pierre Monnin, 2005. "Measuring and forecasting stress in the banking sector: evidence from Switzerland," BIS Papers chapters, in: Bank for International Settlements (ed.), Investigating the relationship between the financial and real economy, volume 22, pages 431-49, Bank for International Settlements.
    12. Eric Santor, 2003. "Banking Crises and Contagion: Empirical Evidence," Staff Working Papers 03-1, Bank of Canada.
    13. Schmidt Paul-Günther, 2001. "Ursachen systemischer Bankenkrisen: Erklärungsversuche, empirische Evidenz und wirtschaftspolitische Konsequenzen," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 52(1), pages 239-280, January.
    14. Aykut Kibritcioglu, 2002. "Monitoring Banking Sector Fragility," Macroeconomics 0206004, University Library of Munich, Germany, revised 17 Mar 2006.
    15. Yorulmazer, Tanju, 2003. "Herd Behavior, Bank Runs and Information Disclosure," MPRA Paper 9513, University Library of Munich, Germany.
    16. Gimet, Celine, 2007. "Conditions necessary for the sustainability of an emerging area: The importance of banking and financial regional criteria," Journal of Multinational Financial Management, Elsevier, vol. 17(4), pages 317-335, October.
    17. Carol Alexander & Anca Dimitriu, 2003. "Equity Indexing: Conitegration and Stock Price Dispersion: A Regime Switiching Approach to market Efficiency," ICMA Centre Discussion Papers in Finance icma-dp2003-02, Henley Business School, University of Reading.
    18. Soedarmono, Wahyoe & Machrouh, Fouad & Tarazi, Amine, 2013. "Bank competition, crisis and risk taking: Evidence from emerging markets in Asia," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 23(C), pages 196-221.
    19. Pratap, Sangeeta & Urrutia, Carlos, 2004. "Firm dynamics, investment and debt portfolio: balance sheet effects of the Mexican crisis of 1994," Journal of Development Economics, Elsevier, vol. 75(2), pages 535-563, December.
    20. ManYing Kang & Marcel Ausloos, 2017. "An Inverse Problem Study: Credit Risk Ratings as a Determinant of Corporate Governance and Capital Structure in Emerging Markets: Evidence from Chinese Listed Companies," Economies, MDPI, vol. 5(4), pages 1-23, November.

    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:imf:imfwpa:2003/017. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.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.