The Real Effects of Bank Distress: Evidence from Bank Bailouts in Germany

SSRN Electronic Journal ◽

10.2139/ssrn.3473033 ◽

2019 ◽

Author(s):

Johannes Bersch ◽

Hans Degryse ◽

Thomas Kick ◽

Ingrid Stein

Keyword(s):

The Real ◽

Real Effects ◽

Bank Bailouts

On the Real Effects of Bank Bailouts: Micro-Evidence from Japan

SSRN Electronic Journal ◽

10.2139/ssrn.2035554 ◽

2011 ◽

Cited By ~ 8

Author(s):

Mariassunta Giannetti ◽

Andrei Simonov

Keyword(s):

The Real ◽

Real Effects ◽

Bank Bailouts

On the Real Effects of Bank Bailouts: Micro Evidence from Japan

American Economic Journal Macroeconomics ◽

10.1257/mac.5.1.135 ◽

2013 ◽

Vol 5 (1) ◽

pp. 135-167 ◽

Cited By ~ 52

Author(s):

Mariassunta Giannetti ◽

Andrei Simonov

Keyword(s):

Banking Crisis ◽

Capital Requirements ◽

Bank Capital ◽

The Real ◽

Real Effects ◽

Nonperforming Loans ◽

Financial Condition ◽

Bank Bailouts ◽

Capital Injections ◽

Bank Capital Requirements

Exploiting the Japanese banking crisis of the 1990s as a laboratory, we investigate the effects of bank bailouts on the supply of credit and the performance of banks' clients. Our findings indicate that the size of capital injections relative to the initial financial condition of banks is crucial for the success of bank bailouts. Capital injections that are large enough to reestablish bank capital requirements increase the supply of credit and spur investment. In contrast, not only do capital injections that are too small fail to increase the supply of credit, but they also encourage the evergreening of nonperforming loans. (JEL E44, G21, G28, G32, G34)