Provides information on the government bailout of financial institutions and different viewpoints on how to deal with the issue.

During the high interest times in the 1970's and 1980's, the banks and the savings and loan associations were under heavy financial pressure. Hundreds of them failed. The Home Loan Bank Board permitted the savings and loan associations to treat goodwill as capital, thereby allowing them to remain open and to build up enormous losses that eventually cost the taxpayers billions of dollars. The Federal Deposit Insurance Corporation took a different approach. It closed the banks or sold them, all at no cost to the taxpayers. Bailout is the engrossing story of how the FDIC handled four of these failures. Book jacket.

Includes a new foreword to the paperback edition.

Setting forth the building blocks of banking bailout law, this book reconstructs a regulatory framework that might better serve countries during future crisis situations. It builds upon recent, carefully selected case studies from the US, the EU, the UK, Spain and Hungary to answer the questions of what went wrong with the bank bailouts in the EU, why the US performed better in terms of crisis management, and how bailouts could be regulated and conducted more successfully in the future. Employing a comparative methodology, it examines the different bailout and bank resolution techniques and tools and identifies the pros and cons of the different legal and regulatory options and their underlying principles. In the post-2008 legal-regulatory architecture financial institution specific insolvency proceedings were further developed or implemented on both sides of the Atlantic. Ten years after the most recent financial crisis, there is sufficient empirical evidence to evaluate the outcomes of the bank bailouts in the US and the EU and to examine a number of cases under the EU’s new bank resolution regime. This book will be of interest of anyone in the field of finance, banking, central banking, monetary policy and insolvency law.

How did we end up in a world where social programs are routinely cut in the name of market discipline and fiscal austerity, yet large banks get bailed out whenever they get into trouble? In The Bailout State, Martijn Konings exposes the inner workings of this sprawling infrastructure of government guarantees. Backstopping financial markets and securing banks’ balance sheets, this contemporary Leviathan manages the inflationary pressures that its generosity produces by tightening the financial screws on the rest of the population. To a large extent, the bailout state was built by progressives seeking to buttress the institutions of the early postwar period. The resulting tide of capital gains fostered an asset-centered politics that experienced its heyday in the nineties. But ever since the financial crisis of 2007-08, promises of inclusive economic growth have looked increasingly thin. A colossus locked in place, the bailout state disburses its benefits to a rapidly shrinking group of property owners. Against the backdrop of a ferocious post-pandemic turn to anti-inflationary policy, the only remaining way to exit the logic of the bailout, Konings argues, is to challenge the monetary drivers at the heart of capitalist society.

Alaska seems to have a monopoly of captivating and enthralling women authors. First, there was Sarah Palin. Now comes Ellen G. Nicdao. But the contrast between the two Alaskan women authors could not be more stark than night and day. Whereas Palin wants tax cuts for the rich, Nicdao wants tax cuts for lower-income Americans. Palin wants the defi cit reduced by limiting government spending. Nicdao wants to turn the defi cit into a surplus by more government spending for projects that will eliminate foreclosures and create millions of jobs. Both women wear glasses. But through Palin's glasses she sees prosperity in America in the hands of the wealthy. Nicdao sees it in the rough, weathered hands of the American laborer. While Palin and her Tea Party talk about giving back Americans their freedom, Nicdao, an Independent, wants freedom from the oppression of foreclosures and joblessness for tens of millions of Americans. A hockey mom, Sarah Palin started honing her skills at PTA meetings. Ellen G. Nicdao built on her Fulbright Hayes graduate studies in economics from the University of Michigan, into a multi-faceted corporate executive career with major U.S. and international companies, culminating in the founding of her own company. In the end, the two Alaskan women engage the reader with riveting books albeit from vastly different perspectives. Palin's "Going Rogue" is a fascinating read on how to rise to a vice-presidential slot from the humble beginnings of a hockey mom. Nicdao's "Bailout Shame," on the other hand, tricks us into entering the complex world of Wall Street by making it appear through the large print of her book that we are reading a children's book where everything is so easy to understand multipliers, collateralized debt obligations, credit default swaps and all. But her razorsharp solutions to America's foreclosures and jobs crises are steeped in fl awless economic theory duly tempered by the realities of Main Street. She envisions the U.S. Treasury earning billions if not trillions of dollars of profi ts as it ends the foreclosures crisis once and for all. The labor-intensive jobs she wants created will employ the tens of millions of unemployed Americans.

The paper suggests that when firms differ stochastically in their productivity, a bank may find it optimal not to bail out the failed nonconglomerate firms at all, but to bail out conglomerates fully. Expectation of such bailout policy may encourage risk-averse firms to join a conglomerate to minimize the risk of liquidation. Furthermore, in case of private information, bad firms follow good firms’ decision on conglomeration to hide their type. Finally, the paper discusses the impact of conglomeration on the debt-equity ratio and the expansion of existing conglomerates through mergers and acquisitions.