Cover IMF Working Papers
Post-Resolution Treatment of Depositors At Failed Banks: Implications for the Severity of Banking Crises, Systemic Risk, and too-Big-To-Fail
Author: Mr. George G. Kaufman and Mr. Steven A. Seelig
Series:
IMF Working Papers
Volume/Issue:
Volume 2001: Issue 083
Language:
English
Publication Date:
01 Jun 2001
DOI:
https://doi.org/10.5089/9781451850543.001
ISBN:
9781451850543
ISSN:
1018-5941
Pages:
23
Keywords:
WP; uninsured depositor; depositor monitoring; unprotected depositor; insurance agency; access delay time.; depositor discipline; depositor pressure; deposit insurance; bank failure; banking crisis; systemic risk; delay time; bailout pressure; depositor access; depositor ownership; Distressed institutions; Bank solvency; Bank deposits; Bank resolution
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Losses may accrue to depositors at insolvent banks both at and after the time of official resolution. Losses at resolution occur because of poor closure rules and regulatory forbearance. Losses after resolution occur if depositors' access to their claims is delayed or "frozen." While the sources and implications of losses at resolution have been analyzed previously, the sources and implications of losses after resolution have received little attention. This paper examines the causes of delayed depositors' access to their funds at resolved banks, describes how the FDIC provides immediate access, reports on a special survey of access practices in other countries, and analyzes the costs and benefits of delayed access in terms of both the effects on market discipline and depositor pressure to protect all deposits.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund