by Sebastian Schich | Sep 14, 2023 | bank levy, Ending too-big-to-fail, financial safety net, financial sector guarantees, financial support for SMEs, implicit guarantees, TBTF, too-big-to-fail, why banks are special
Banking sector extraordinary privileges Banks benefit from an extraordinary privilege: in times of impending systemic financial crises, governments act as guarantors of last resort for banks’ financial obligations. This privilege is not paid, at least not...
by Sebastian Schich | Jul 20, 2023 | financial safety net, financial sector guarantees, financial support for SMEs, implicit guarantees, TBTF, too-big-to-fail
Financial sector guarantees are a key public policy tool All financial claims are risky. Against this background, governments have traditionally provided support for guarantees of financial claims, provided they of public policy interest. This choice is based on the...
by Sebastian Schich | Jun 21, 2023 | bank "specialness", financial safety net, financial sector guarantee, Fintech, why are banks special, why banks are special
Fintech developments challenge the business model of incumbent financial market players but are they making banks less “special”? The short answer is no. Banks manage two sets of cash flows – deposits and loans – and provide two key services – liquidity provision and...
by Sebastian Schich | Jul 20, 2022 | Ending too-big-to-fail, financial safety net, implicit guarantees, TBTF, too-big-to-fail
Are changes in regulation and resolution regimes sufficient to reduce the value of implicit bank debt guarantees? Or are actual losses for bank creditors needed? Banks continue to benefit from implicit guarantees (Schich, 2018). Market participants’ expectations that...
