Understanding the Components of Bank Failure Resolution Costs

48 Pages Posted: 20 Aug 2014

See all articles by Rosalind L. Bennett

Rosalind L. Bennett

FDIC, Division of Insurance and Research

Haluk Unal

University of Maryland - Robert H. Smith School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: July 2014

Abstract

In this paper, we demonstrate how the resolution costs associated with over 1,000 bank failures from 1986 to 2007 are distributed across the method of resolution, bank size, regulatory periods, and the existence of fraud. In addition, we document the time spent in the resolution by the resolution method and legislative period. Finally, we show how various classes of claimants against the failed banks bear the costs of the failure.

Keywords: bank failures, bank resolution costs, FDIC receivership, fire sales, banking

JEL Classification: G21, G28, G33

Suggested Citation

Bennett, Rosalind L. and Unal, Haluk, Understanding the Components of Bank Failure Resolution Costs (July 2014). Forthcoming in Financial Markets, Institutions & Instruments, FDIC Division of Insurance Research Paper No. 2014-04, Robert H. Smith School Research Paper No. RHS 2482359, Available at SSRN: https://ssrn.com/abstract=2482359 or http://dx.doi.org/10.2139/ssrn.2482359

Rosalind L. Bennett (Contact Author)

FDIC, Division of Insurance and Research ( email )

550 Seventeenth Street, NW
Washington, DC 20057
United States
202-898-7160 (Phone)

Haluk Unal

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States
301-405-2256 (Phone)
301-405 0359 (Fax)

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