Understanding the Components of Bank Failure Resolution Costs
Forthcoming in Financial Markets, Institutions & Instruments
48 Pages Posted: 20 Aug 2014
Date Written: July 2014
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: Suggested Citation