20210805-IMF-Resolving_Bank_Failures_and_Institutions_Is_there_a_Link_Some_Empirical_Evidence_29页_566kb

Bank Failures and Institutional Linkages

Bank supervisors' intervention in bank failures correlates with aspects of administrative and regulatory frameworks, especially during financial instability. This correlation extends to fiscal outcomes, where certain institutional features are associated with lower fiscal outlays during banking crises. The analysis emphasizes that effective resolution frameworks—characterized by administrative independence and due process-oriented procedures—may enhance the ability of authorities to protect financial stability.

The empirical results demonstrate that institutions with a focus on due process and independent oversight tend to have higher frequencies of supervisor actions during bank failures. This suggests that enabling institutional arrangements can facilitate effective crisis management and mitigate the economic and fiscal costs of financial crises.