TY  - UNPD
A1  - Tröger, Tobias
T1  - Too complex to work: a critical assessment of the bail-in tool under the european bank recovery and resolution regime
T2  - SAFE working paper series ; No. 179
N2  - This paper analyses the bail-in tool under the BRRD and predicts that it will not reach its policy objective. To make this argument, this paper first describes the policy rationale that calls for mandatory PSI. From this analysis the key features for an effective bail-in tool can be derived. These insights serve as the background to make the case that the European resolution framework is likely ineffective in establishing adequate market discipline through risk-reflecting prices for bank capital. The main reason for this lies in the avoidable embeddedness of the BRRD’s bail-in tool in the much broader resolution process which entails ample discretion of the authorities also in forcing private sector involvement. Finally, this paper synthesized the prior analysis by putting forward an alternative regulatory approach that seeks to disentangle private sector involvement as a precondition for effective bank-resolution as much as possible form the resolution process as such.
T3  - SAFE working paper - 179 
KW  - bail-in
KW  - private sector involvement
KW  - precautionary recapitalization
KW  - cross-border insolvency
KW  - market discipline
Y1  - 2017
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/44447
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-444475
UR  - https://ssrn.com/abstract=3023184
IS  - August 20, 2017
PB  - SAFE
CY  - Frankfurt am Main
ER  -