Fiscal Aspects of Bank Restructuring
Author | : Mr.James Daniel |
Publisher | : International Monetary Fund |
Total Pages | : 34 |
Release | : 1997-04-01 |
ISBN-10 | : 9781451847215 |
ISBN-13 | : 1451847211 |
Rating | : 4/5 (211 Downloads) |
Download or read book Fiscal Aspects of Bank Restructuring written by Mr.James Daniel and published by International Monetary Fund. This book was released on 1997-04-01 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: Governments frequently assist troubled banks. This paper examines the fiscal aspects of such assistance: rationale, design criteria, methods, and macroeconomic implications. It concludes that (1) banks should be assisted only when there is a clear systemic risk; (2) assistance should be tied to a comprehensive restructuring program, minimize fiscal cost, be equitable and transparent, prevent recurrence, and facilitate a sound macroeconomic environment; (3) debt-based assistance will worsen public sector debt sustainability and will probably increase aggregate demand; and (4) assistance may require a substantial fiscal response (especially given the possible need for a looser monetary stance), which should feed iteratively into the choice of restructuring strategy.