Online Appendix for: The Decline of Too Big to Fail
75 Pages Posted: 12 Apr 2024 Last revised: 13 Dec 2024
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Online Appendix for: The Decline of Too Big to Fail
Online Appendix for "The Decline of Too Big To Fail"
Date Written: November 23, 2024
Abstract
For globally systemically important banks (GSIBs) with US headquarters, we find significant reductions in market-implied probabilities of government bailout after the Global Financial Crisis (GFC), along with roughly 170% higher wholesale debt financing costs for these banks after controlling for insolvency risk. Since the GFC, bank creditors appear to expect much larger losses in the event that a GSIB approaches insolvency. In this sense, we estimate a decline of "too big to fail."
Keywords: Too big to fail, systemically important banks, bailouts
JEL Classification: G12, G13, G21, G28
Suggested Citation: Suggested Citation