CEU Electronic Theses and Dissertations, 2017
| Author | Toronyai, Bálint Álmos |
|---|---|
| Title | Bail-in Expectations in the EU : the Impact of Italy's Banking Crisis Management |
| Summary | This thesis studies the impact of bail-in relevant events of the recent Italian banking crisis on bail-in expectations in the European Union. To analyze such relation, this thesis introduces an empirical model, using CDS spread and stock return data of European banks to mark the changes in bail-in expectations. The results of the models show that the creation of the Atlante private bail-out fund – pressured by the Italian government – and an actual private rescue of the most vulnerable Italian bank decreased most prominently the bail-in expectations in the EU. Another significant result demonstrates a negative impact on bail-in expectations of the announcement of a bail-out plan by the Italian Prime Minister, even after its rejection by the German Chancellor. The thesis concludes that the success of the bail-in tool –as a key component of the new EU bank resolution framework - depends on the credible pledge for actually implementing it in proper conditions. In order to gain this credibility, the EU authorities should enforce the principles of the new bank recovery and resolution system, they should decline the effort of the Italian government to challenge these regulations in the current dealing of bailing out Italian bondholders. Moreover, they should clearly indicate that even if private bail-outs supported in non-financial ways by governments, they should not be considered as signs for future state bail-outs. |
| Supervisor | Zawadowski, Ádám |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2017/toronyai_balint.pdf |
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