The introduction of bail-in resolution powers to impose the costs of a large bank’s failure on its creditors rather than on the taxpayer is the most enthralling initiative of the post-financial crisis regulatory framework. However, one important conundrum remains in the elaborate bail-in regime: it is unclear who is best qualified to hold bank capital that is subject to bail-in.
In his lecture, Ringe argues that such regulatory agnosticism as to who should hold bail-in-able debt is subverting the new bail-in tool altogether, verily inducing banking capital investors to counterproductively choose outcomes that further systemic risk.
IMFS Working Lunch
Prof. Dr. Wolf-Georg Ringe, Chair for Economics Analysis of Law, University of Hamburg
"The Dark Side of Bank Resolution: Counterparty Risk Through Bail-in"
Wednesday, November 22, 2018
Room “Commerzbank”, House of Finance
Goethe University Frankfurt
Please register here