Too many to fail—An analysis of time-inconsistency in bank closure policies

By V. Acharya, Tanju Yorulmazer. 2007

689 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/a91c0798a002bcc6e56fb02d410a4f044c1cff6d

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Citations in the corpus

Competition and Financial Stability in European Cooperative Banks (2014, methodology): “views do not apply to cooperative banks, we recognize that cooperative bank closure policies may suffer from an implicit “Too-Many-To-Fail” problem as suggested by Acharya and Yorulmazer (2007). Specifically, when the number of bank failures is large,”
Bank Capital and Financial Stability: An Economic Trade-Off or a Faustian Bargain? (2014, background): “…by this research is whether the reduced lending due to higher or more risk-sensitive capital requirements is a good or a bad thing for society, given the propensity of banks to herd and overlend to some sectors (for a theory of banks herding in their asset choices, see Acharya & Yorulmazer 2007).”
How Much Did Banks Pay to Become Too-Big-To-Fail and to Become Systemically Important? (2009, neutral): “17 For further discussion on regulatory forbearance when the banking system is weak and when there are “too many to fail,” see Brown and Dinc (2009) and Acharya and Yorulmazer (2007).”
Caught between Scylla and Charybdis? Regulating Bank Leverage When There is Rent-Seeking and Risk-Shifting (2015, neutral): “6 Acharya and Yorulmazer (2007), Acharya (2009), and Farhi and Tirole (2012) build formal models of the regulator’s time-consistency problem when banks fail together and of the induced herding behavior in banks.”
Collective Moral Hazard, Maturity Mismatch and Systemic Bailouts (2012, neutral): “Any 0 ∈ (0,1) is dominated: by Assumption 8, such interest rates reduce welfare from generation 0 and do nothing to help generation −1.”
Do Banks Benefit from Internationalization? Revisiting the Market Power-Risk Nexus (2013, neutral): “liquidity) (Acharya and Yorulmazer 2007). From a theoretical point of view, we expect more profitable, better capitalized, and banks with a less risky asset portfolio to be less likely to experience a distress event. The signs for the control variables are in line with these expectations and with pr”
Are Banks Too Big to Fail? Measuring Systemic Importance of Financial Institutions (2010, background): “This comes from the “too many to fail” phenomenon discussed by Acharya and Yorulmazer (2007). They consider a game theory approach and show that because regulators would bail out a bank in distress only if a large part of the system suffers from distresses, individual banks would have an incentive t”
Systemic Risk and Deposit Insurance Premiums (2009, methodology): “We use the set-up in Acharya and Yorulmazer (2007).”
Credit Risk Transfer Activities and Systemic Risk: How Banks Became Less Risky Individually But Posed Greater Risks to the Financial System at the Same Time (2011, neutral): “each other. This may amplify the risk of systemic crisis in the financial system (Elsinger et al. (2006); Acharya and Yorulmazer (2007) ; Wagner (2008a,c)) since it increases the likelihood that banks incur losses jointly (a situation experienced in the current crisis).”
Strategic Complementarity, Fragility, and Regulation (2014, neutral): “36 See Calomiris and Kahn (1991), Diamond and Rajan (2000), Gale and Vives (2002) and Rochet and Vives (2004) for related approaches to the issue.”
Bank capital management: International evidence (2015, background): “Second, regulators have more incentives to bail out banks if default is systemic rather than idiosyncratic (Acharya and Yorulmazer, 2007).”
Estimating Global Bank Network Connectedness (2017, neutral): “…credible 1See, among others, the classic work of Shleifer & Vishny (1992), F. Allen & Gale (1994), F. Allen & Gale (2000), Cifuentes et al. (2005), Acharya & Yorulmazer (2007), and Gorton (2015). framework for “getting the facts straight”, regardless of the underlying structural mechanism(s),…”
Systemic Risk in Financial Networks: A Survey (2020, neutral): “If more banks fail at once, a default cascade is more likely to be triggered, and the regulator has more incen- tives to step in. Acharya & Yorulmazer (2007) highlight this “too-many-to-fail” problem that incentivizes banks to correlate their portfolios, because if they all become insolvent…”