During the financial crisis of 2008–2010, governments have had varying success in containing the fiscal costs of stabilizing their financial sectors. This article challenges the existing literature... Show moreDuring the financial crisis of 2008–2010, governments have had varying success in containing the fiscal costs of stabilizing their financial sectors. This article challenges the existing literature that attributes these differences purely to national factors and contends that the international dimension affects a government’s capacity to share the costs across borders. Specifically, if a country shares a leveraged creditor with other countries, concerns about regional contagion will drive decisions by outside actors to participate in or prevent external burden sharing. A comparison of the role of the Swedish government during the financial crisis in Latvia and the ECB’s influence on Ireland shows that these decisions can both facilitate or prevent international burden-sharing. While Latvia benefited both from maintained exposure by Swedish banks and an internationally coordinated response to its crisis, the Irish government accumulated losses because foreign banks reduced their exposure and the European Central Bank vetoed “bailing in” bondholders of bankrupt banks. Future research on financial stabilization should therefore more explicitly consider possible contagion effects from bailing in foreign creditors. Show less
This dissertation investigated what the legal framework for recognition of foreign bank resolution actions should be. It aims to fulfil the current gap in legislative actions and scholarly research... Show moreThis dissertation investigated what the legal framework for recognition of foreign bank resolution actions should be. It aims to fulfil the current gap in legislative actions and scholarly research on the issue of cross-border bank resolution and attempts to formulate rules that would facilitate resolution actions effective across borders so as to achieve the ultimate goal of a global orderly resolution for banks. This dissertation conducts both normative and positive analysis and compares three jurisdictions, namely, the European Union, the United States and China. Building on the traditional legal doctrines of private international law, financial law and insolvency law, this dissertation proposes ten principles that should apply in recognition of foreign bank resolution actions. Show less
Hardie, I.; Howarth, D.; Maxfield, S.; Verdun, A. 2013
In this introductory chapter we first review the standard bank–credit/capital markets dichotomy used to describe national financial systems. We examine the influence of this dichotomy in the... Show moreIn this introductory chapter we first review the standard bank–credit/capital markets dichotomy used to describe national financial systems. We examine the influence of this dichotomy in the comparative political economy (CPE) literature, which is the disciplinary focus of most of the contributors to this volume. We explain how effectively scholars of the political economy of finance explain the phenomenon of change and then briefly describe the market-based banking model in the context of the broader national financial systems. In the penultimate section, we consider the impact of market-based banking on the domestic political economy and the impact of the international financial crisis. Show less
