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LTI@Unito
and Fondazione
Collegio Carlo
Alberto are
pleased to
invite you to
the following
workshop
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May 24, 2021 | 12:45 - 13:45
“Recapitalization,
Bailout, and
Long-run
Welfare in a
Dynamic Model
of Banking”
Andrea
Modena
(University of
Bonn,
Università Ca’
Foscari
Venezia)
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Abstract.
We
study the
trade-off
between the
short-run
costs and the
long-run
benefits of
bank bailouts.
In the model,
banks
leverage,
thanks to
their cost
advantage at
monitoring
firms, but
hold
precautionary
capital
buffers to
avoid costly
equity
issuance.
Banks’
recapitalization
is suboptimal
because they
do not
internalize
the
externalities
of the banking
sector’s
relative size
on their
individual
leverage
capacity and
firms’
investments.
Systematic
bailouts can
improve the
allocation
efficiency in
bad states, in
which banks’
leverage is
persistently
constrained
and
investments
are low. In
the long run,
bailouts
accelerate the
economy’s
recovery by
fostering
growth,
thereby
reducing
endogenous
risk.
Zoom
link:
Meeting
ID: 835 9662
4662 Passcode:
056057
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UNDER THE NEW GENERAL
DATA PROTECTION
REGULATION (GDPR)
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If you wish to have your
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please contact Fondazione
Collegio Carlo Alberto,
piazza Arbarello 8, 1022
Torino, Italy - phone:
+390116705000 -
privacy@carloalberto.org
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© 2021 Fondazione
Collegio Carlo Alberto
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