Comment: Banking

  • Christian De Boissieu
Part of the Financial and Monetary Policy Studies book series (FMPS, volume 30)


The optimization model built by F. Bruni and F. Paterno underlines, in the definition of the objective function and the constraints, some costs and benefits associated with the policy choice of bailout versus no-bailout. It would be of interest to introduce some other real costs, i.e., costs for the real economy. For example, the bailout policy could lead to systemic distortions (the “moral hazard” arguments) and to crowding-out effects generated by increased public expenditures. Conversely, the no-bailout policy could induce a cumulative loss of confidence, systemic repercussions, and short-run and long-run implications on investment, growth, employment, etc. In both cases, the policy has an impact on the real growth path. The channels and the intensity of this impact need to be analyzed more carefully by referring to dynamic models with a sufficient degree of integration of real and financial variables.


Monetary Policy Financial Institution Hedge Fund European Central Bank Capital Ratio 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Copyright information

© Springer Science+Business Media New York 1995

Authors and Affiliations

  • Christian De Boissieu
    • 1
  1. 1.University of Paris I (Pantheon-Sorbonne)ParisFrance

Personalised recommendations