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The Future of Financial Regulation
Who Should Pay for the Failure of American and European Banks?

$131.00 (P)

  • Date Published: March 2016
  • availability: Available
  • format: Hardback
  • isbn: 9781107106857

$ 131.00 (P)

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About the Authors
  • A number of changes have been made to the supervision and regulation of banks as a result of the recent financial meltdown. Some are for the better, such as the Basel III rules for increasing the quality and quantity of capital in banks, but legal changes on both sides of the Atlantic now make it much more difficult to resolve failing banks by means of taxpayer funded bail-outs and could hinder bank resolution in future financial crises. In this book, Johan A. Lybeck uses case studies from Europe and the United States to examine and grade a number of bank resolutions in the last financial crisis and establish which were successful, which failed, and why. Using in-depth analysis of recent legislation, he explains how a bank resolution can be successful, and emphasizes the need for taxpayer-funded bail-outs to create a viable banking system that will promote economic and financial stability.

    • Analyses and grades several bank resolutions in the last financial crisis, establishing which were successful, which failed, and why, providing an invaluable resource for academic researchers, graduate students, practitioners and policy makers
    • Presents and analyses the recent changes in legislation (Dodd Frank in the United States, the Bank Recovery and Resolution Directive and the Single Resolution Mechanism in Europe) and proposes improvements - this broad survey is one of the first to appear from an economic rather than a legal point of view
    • Unique cross-Atlantic perspective helps to clarify the differences between individual bank resolutions as well as the difference between approaches to systemic banking crises in Europe and the US
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    Reviews & endorsements

    "This book offers a deep dive into the issue of how to handle failing banks. The topic is important for understanding recent events in the US, current events in Europe, and much of what we will experience in the future. The author's main contribution is to provide detailed and well-researched case studies of what happened in particular banks - some of which experienced various forms of bailout, while others (or their investors) were subject to various kinds of bail-ins."
    Simon Johnson, Ronald A. Kurtz (1954) Professor of Entrepreneurship, MIT Sloan School of Management

    "Whatever opinion one holds on the author's view about the relative merits of bailing in or bailing out, this book makes a major contribution through its long chronology of events in the global financial crisis and its extensive set of case studies of the treatment of bank problems in that period. Other books exist which look at single countries, primarily the US, but there is no equivalent which considers the problems in both the US and Europe so thoroughly."
    David Mayes, University of Auckland Business School

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    Product details

    • Date Published: March 2016
    • format: Hardback
    • isbn: 9781107106857
    • length: 598 pages
    • dimensions: 236 x 155 x 36 mm
    • weight: 0.96kg
    • contains: 40 b/w illus. 25 tables
    • availability: Available
  • Table of Contents

    List of abbreviations
    Part I. A Chronological Presentation of Crisis Events January 2007–December 2014
    Part II. Bail-Out and/or Bail-In of Banks in Europe - A Country-by-Country Event Study on Those European Countries Which Did Not Receive Outside Support:
    1. United Kingdom: Northern Rock, Royal Bank of Scotland (RBS), Lloyds Banking Group
    2. Germany: IKB, Hypo Real Estate, Commerzbank, Landesbanken
    3. Belgium, France, Luxembourg: Dexia
    4. Benelux: Fortis, ING, SNS Reaal
    5. Italy: Monte dei Paschi de Siena
    6. Denmark: Roskilde Bank, Fionia Bank and the others vs Amagerbanken and Fjordbank Mors
    Part III. Bail-Out and/or Bail-In of Banks in Europe - A Country-by-Country Event Study on Those European Countries Which Received IMF/EU Support:
    7. Iceland: Landsbanki, Glitnir and Kaupthing
    8. Ireland: Anglo Irish Bank, Bank of Ireland, Allied Irish Banks
    9. Greece: Emporiki, Eurobank, Agricultural Bank
    10. Portugal: Caixa Geral, Banco Espirito Santo, Millennium Bank
    11. Spain: Bankia and the other ex-cajas
    12. Cyprus: Bank of Cyprus, Popular Bank (Laiki)
    Part IV. The Tarp Program and the Bailing Out (and Bailing In) of US Banks:
    13. The roles of the FDIC, the Treasury and the Fed in the crisis
    14. USA: Bear Stearns, Merrill Lynch and Lehman Brothers
    15. USA: Countrywide, IndyMac, Washington Mutual and Wachovia
    16. USA: AIG, Citibank and Bank of America: zombies too big to fail?
    Part V. Summary of the Micro Studies
    Part VI. Political and Regulatory Responses to the Crisis - To Bail Out or To Bail In, That's the Question:
    17. Future bail-outs in the United States under Dodd-Frank and OLA
    18. Future bail-outs in the European Union under the Single Resolution Mechanism and the Bank Recovery and Resolution Directive
    Conclusion: towards host-country supervision and resolution?

  • Author

    Johan A. Lybeck, Finanskonsult AB, Sweden
    Johan A. Lybeck is CEO of Finanskonsult AB. As an academic, he has been, inter alia, a Chaired Professor of Economics, an Associate Research Professor of Econometrics and an Adjunct Professor of Finance. His banking career includes positions as Senior Vice President of Swedbank (Stockholm) in charge of financial strategy and Chief Economist at Matteus Bank. He is the author of A Global History of the Financial Crash of 2007–2010 (Cambridge, 2011).

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