Managing Confidence In Emerging Market Bank Runs


Managing Confidence In Emerging Market Bank Runs
Author: Mr. Ashoka Mody
Publisher: International Monetary Fund
ISBN: 1451920288
Size: 16.50 MB
Format: PDF, Kindle
View: 4681
Get Books

Managing Confidence In Emerging Market Bank Runs

eBook File: Managing-confidence-in-emerging-market-bank-runs.PDF Book by Mr. Ashoka Mody, Managing Confidence In Emerging Market Bank Runs Books available in PDF, EPUB, Mobi Format. Download Managing Confidence In Emerging Market Bank Runs books, In a rational-expectations framework, we model depositors'' confidence as a function of the probability of future bank bailouts. We analyze the effect of alternative bank bailout policies on depositors'' confidence in an emerging market setting, where liquidity shortages of banks are revealed sequentially and governments cannot credibly commit to bailing out all potentially distressed banks. Our findings suggest that allowing early bank failures and using available liquidity for credible commitments to later bailouts can better boost confidence than early bailouts. This conclusion arises because with a high chance of liquidity shortage in the future, depositors may lose confidence and hence withdraw deposits even from potentially sound banks. Such a policy of late bailouts is likely to receive political support when a full bailout needs to be financed by taxation. The logic of late bailout remains valid even when banks may hide their distress or when closures of early distressed banks create contagion.


Managing Confidence in Emerging Market Bank Runs
Language: en
Pages: 29
Authors: Mr.Ashoka Mody, Mr.Se-Jik Kim
Categories: Business & Economics
Type: BOOK - Published: 2004-12-01 - Publisher: International Monetary Fund
In a rational-expectations framework, we model depositors' confidence as a function of the probability of future bank bailouts. We analyze the effect of alternative bank bailout policies on depositors' confidence in an emerging market setting, where liquidity shortages of banks are revealed sequentially and governments cannot credibly commit to bailing out all potentially distressed banks. Our findings suggest that allowing early bank failures and using available liquidity for credible commitments to later bailouts can better boost confidence than early bailouts. This conclusion arises because with a high chance of liquidity shortage in the future, depositors may lose confidence and hence withdraw deposits even from potentially sound banks. Such a policy of late bailouts is likely to receive political support when a full bailout needs to be financed by taxation. The logic of late bailout remains valid even when banks may hide their distress or when closures of early distressed banks create contagion.
Managing Confidence in Emerging Market Bank Runs
Language: en
Pages: 28
Authors: Se-Jik Kim
Categories: Bank failures
Type: BOOK - Published: 2004 - Publisher: International Monetary Fund
Books about Managing Confidence in Emerging Market Bank Runs
Regulating and Combating Money Laundering and Terrorist Financing
Language: en
Pages: 320
Authors: Nkechikwu Valerie Azinge
Categories: Business & Economics
Type: BOOK - Published: 2021-03-02 - Publisher: Routledge
This book analytically reviews the impact of the global anti-money laundering and counter-terrorist financing (AML/CFT) framework on the compliance trajectory of a number of jurisdictions to this framework. The work begins by examining the international financial sector reform and its evolution to inculcate the global framework for AML/CFT regulations. It challenges the resulting uniform AML/CFT due to its paradoxical impact on the compliance trajectory of African countries and emerging economies (ACs/EEs). This is done through an examination of the pre-conditions for effective regulation and compliance drivers for ACs/EEs that reveals the behavioural impact of the AML/CFT standards on the bloc of countries. Through the application of agency theory, it explores the relationship between ACs/EEs on the one hand and the international financial institutions that formulate, disseminate and facilitate compliance with the global framework for AML/CFT standards on the other. The remaining chapters review empirically the compliance pressures and resulting compliance trajectory of ACs/EEs with the AML/CFT standards. The final part of the book provides a detailed explanation of the compliance challenges of ACs/EEs and the legitimacy concerns that facilitate this. This book offers a new direction on the impact of global AML/CFT standards on ACs/EEs and contributes to the understanding
The Use of Blanket Guarantees in Banking Crises
Language: en
Pages: 43
Authors: Luc Laeven, Fabian Valencia
Categories: Business & Economics
Type: BOOK - Published: 2008-10 - Publisher: International Monetary Fund
In episodes of significant banking distress or perceived systemic risk to the financial system, policymakers have often opted for issuing blanket guarantees on bank liabilities to stop or avoid widespread bank runs. In theory, blanket guarantees can prevent bank runs if they are credible. However, guarantee could add substantial fiscal costs to bank restructuring programs and may increase moral hazard going forward. Using a sample of 42 episodes of banking crises, this paper finds that blanket guarantees are successful in reducing liquidity pressures on banks arising from deposit withdrawals. However, banks' foreign liabilities appear virtually irresponsive to blanket guarantees. Furthermore, guarantees tend to be fiscally costly, though this positive association arises in large part because guarantees tend to be employed in conjunction with extensive liquidity support and when crises are severe.
IMF Research Bulletin
Language: en
Pages:
Authors: Luc Laeven, Fabian Valencia
Categories: International finance
Type: BOOK - Published: 2004 - Publisher:
Books about IMF Research Bulletin
Artha Suchi
Language: en
Pages:
Authors: Luc Laeven, Fabian Valencia
Categories: Economics
Type: BOOK - Published: 2004 - Publisher:
Books about Artha Suchi
The Mexican Peso Crisis
Language: en
Pages: 650
Authors: United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs, Stati Uniti d'America. Congress. Senate. Committee on Banking, Housing and Urban Affairs, United States
Categories: Devaluation of currency
Type: BOOK - Published: 1995 - Publisher:
Books about The Mexican Peso Crisis
Managing Currency Crises in Emerging Markets
Language: en
Pages: 408
Authors: Michael P. Dooley, Jeffrey A. Frankel
Categories: Business & Economics
Type: BOOK - Published: 2007-11-01 - Publisher: University of Chicago Press
The management of financial crises in emerging markets is a vital and high-stakes challenge in an increasingly global economy. For this reason, it's also a highly contentious issue in today's public policy circles. In this book, leading economists-many of whom have also participated in policy debates on these issues-consider how best to reduce the frequency and cost of such crises. The contributions here explore the management process from the beginning of a crisis to the long-term effects of the techniques used to minimize it. The first three chapters focus on the earliest responses and the immediate defense of a currency under attack, exploring whether unnecessary damage to economies can be avoided by adopting the right response within the first few days of a financial crisis. Next, contributors examine the adjustment programs that follow, considering how to design these programs so that they shorten the recovery phase, encourage economic growth, and minimize the probability of future difficulties. Finally, the last four papers analyze the actual effects of adjustment programs, asking whether they accomplish what they are designed to do-and whether, as many critics assert, they impose disproportionate costs on the poorest members of society. Recent high-profile currency crises have proven not
Novai︠a︡ literatura po sot︠s︡ialʹnym i gumanitarnym naukam
Language: ru
Pages:
Authors: Michael P. Dooley, Jeffrey A. Frankel
Categories: Economics
Type: BOOK - Published: 2006 - Publisher:
Books about Novai︠a︡ literatura po sot︠s︡ialʹnym i gumanitarnym naukam
Novai︠a︡ literatura po so︠t︡sialʹnym i gumanitarnym naukam
Language: ru
Pages:
Authors: Michael P. Dooley, Jeffrey A. Frankel
Categories: Economics
Type: BOOK - Published: 2006 - Publisher:
Books about Novai︠a︡ literatura po so︠t︡sialʹnym i gumanitarnym naukam