International Monetary Fund. External Relations Dept.
hampered innovation and discouraged change.
Restoring external competitiveness entails restructuring, investment, and technical assistance. Determination of those products and processes that retain a comparative advantage, and the steps needed to improve the efficiency and cost of the production units, are critical for restructuring. Restructuringdecisions should, in turn, guide investment decisions. (Investment requirements are likely to be substantial—estimated at US$400-900 million for each of the countries over five years, though actual outlays may be considerably
Mr. Tamon Asonuma, Mr. Marcos d Chamon, Aitor Erce, and Akira Sasahara
B. Augmented Inverse Probability Weighted (AIPW) Estimation
C. Role of Capital Inflow-Credit Channel
D. Duration, Haircuts, and Missed Payments
IV. Logit Approach
1: Dataset, 3-year Horizon
2: Characteristics of the Treatment and Control Groups
3: Predicting the Start of Debt Restructurings, Probit
4: Predicting Duration and Haircuts, Poisson
5: Banking Crises and Severe Credit and Net Capital Inflow Declines after Debt
1: Debt Restructurings, Severe Credit Declines and Protracted
over how market confidence in the banks develop during the restructuring process, since this affects their liquidity and, indirectly, their solvency. Both authorities also wield some power of enforcement to support restructuringdecisions, the supervisors on the basis of laws and the central bankers because of their status as lenders to the banks. They also share the concern that restructuring should proceed in a manner which does not disturb the financial markets or make them less transparent.
However, the general responsibilities given these authorities do not
Ms. Marina Moretti, Mr. Marc C Dobler, and Mr. Alvaro Piris Chavarri
Financial Crises, 1980–2017
Figure 2. The Financial Safety Net
Figure 3. Resolution Tools and Policy Trade-offs
Figure 4. Systemic Bank Restructuring: Decision Tree
Figure 5. Stylized Balance Sheet Impact of Different Resolution Powers
Figure 6. NPL Resolution Options
Figure 7. ELA and DIS in Low-Income Developing Countries
Table 1. Lessons on the Design of the Financial Safety Net
Table 2. Lessons on Operational Preparedness
Table 3. Lessons in Crisis Containment
Table 4. Central Bank Liquidity Provision Post-GFC
Table 5. Comparing
Systemic bank restructuring must be the responsibility of one government authority only, with other authorities providing support and analytical help. The restructuring authority, whose tasks are enumerated and discussed, should preferably be a separate and temporary agency reporting to the finance ministry. Other solutions are possible but not recommended. Parliament should be involved in setting priorities and supervising the process, but political interference in restructuring operations should be avoided. Practical issues to consider include ensuring efficient cooperation between authorities; the arrangement of problem asset workout and recovery; and restructuring of politically sensitive enterprises.
Marquez , 2007 , “ Stakeholder Capitalism, Corporate Governance and Firm Value ,” mimeo . Wharton School, University of Pennsylvania ,
Atanassov , Julian , and E. Han Kim , 2007 , “ Labor Laws and Corporate Governance: Evidence from RestructuringDecisions around the World ,” Ross School of Business Paper No. 1044 , University of Michigan . Forthcoming, Journal of Finance
Autor , David H. , John J. Donohue , III and Stewart J. Schwab , 2006 , “ The Costs of Wrongful-Discharge Laws ,” Review of Economics and Statistics , Vol. 88 , No. 2