Banks in Crisis

The current financial crisis evolved quickly. In most of the developed countries affected, governments initially improvised solutions that eventually led to substantial investments in systemically important banks. Not all their actions are worth emulating, especially those that undermine normal governance arrangements and the ability of all shareholders to hold the banks' board and management accountable. Lessons from earlier crises show that governments acting as temporary owners can minimize costs to taxpayers by following sound commercial practices and good corporate governance principles. Quickly developing and making public the exit strategy is also important.

Bibliographic Details

Main Author:	Scott, David
Language:	English
Published:	World Bank, Washington, DC 2009-10
Subjects:	ACCOUNTABILITY, ACCOUNTING, AUDITING, BALANCE SHEET, BANK EQUITY, BANK LENDING, BANK RECAPITALIZATION, BANKING CRISIS, BANKING SYSTEM, BANKRUPTCY, BANKRUPTCY LAW, BANKS, BENEFICIARIES, BOOK VALUE, BOOK VALUE OF ASSETS, CAPITAL ACCORD, CAPITAL ADEQUACY, CAPITAL RATIOS, CAPITAL REQUIREMENTS, COMMON EQUITY, COMMON SHARES, COMMON STOCK, CONVERSIONS, CORPORATE GOVERNANCE, CORPORATE LAW, CREDIT DECISIONS, CREDIT EXPANSION, DEBT, DEBT RESTRUCTURING, DEPOSIT, DISTRESSED BANK, DISTRESSED BANKS, DIVESTMENT, DIVIDEND, DIVIDEND PAYMENTS, DIVIDEND YIELD, EARLY REPAYMENT, EMERGING-MARKET, EQUITY CONVERSIONS, EQUITY MARKET, FAILED BANKS, FEDERAL DEPOSIT INSURANCE, FEDERAL DEPOSIT INSURANCE CORPORATION, FINANCIAL CRISIS, FINANCIAL HEALTH, FINANCIAL INSTITUTIONS, FINANCIAL INSTRUMENTS, FINANCIAL REFORMS, FINANCIAL STRENGTH, FINANCIAL SYSTEM, FORBEARANCE, FUTURE EARNINGS, GOVERNANCE ISSUES, GOVERNANCE PRACTICES, GOVERNMENT INVESTMENT, GOVERNMENT INVESTMENTS, GOVERNMENT OWNERSHIP, GOVERNMENT PAPER, INDEBTEDNESS, INFORMATION TECHNOLOGY, INSOLVENT, INTEREST RATES, INVESTING, INVESTMENT BANK, INVESTMENT BANKING, INVESTMENT DECISION, INVESTMENT NEEDS, LAST RESORT, LEGAL REQUIREMENTS, LEVERAGE, LIQUIDATION, LIQUIDITY, MARKET ANALYSTS, MARKET DEVELOPMENTS, MARKET DISTORTIONS, MARKET INTEREST, MARKET INTEREST RATES, MARKET VALUATIONS, MINIMUM CAPITAL REQUIREMENTS, NEGOTIATIONS, NEW CREDIT, OWNERSHIP INTEREST, OWNERSHIP RIGHTS, PASSIVE INVESTOR, PAYMENTS SYSTEM, POLICY RESPONSES, PORTFOLIO, POTENTIAL INVESTORS, PREFERRED STOCK, PRIVATE SECTOR DEVELOPMENT, PROFESSIONAL INVESTOR, PROFITABILITY, PRUDENTIAL RULES, PUBLIC ACCOUNTABILITY, PUBLIC INVESTMENTS, PUBLIC POLICY, PUBLIC SALE, RATE OF RETURN, RECAPITALIZATION, RECAPITALIZATIONS, REDEMPTION, REGULATORY CAPITAL, REPAYMENT, RETURN, RETURN ON INVESTMENT, RISK MANAGEMENT, RISK PROFILE, SEIZURE, SHAREHOLDER, SHAREHOLDERS, SOLVENT, STATEMENT, SUBORDINATED DEBT, SUPERVISORY AUTHORITIES, TIER 1 CAPITAL, TRANSPARENCY, TREASURY, UNSECURED CREDITORS, VALUATIONS, VALUE OF ASSETS, WARRANTS,
Online Access:	http://documents.worldbank.org/curated/en/2009/10/11800003/banks-crisis https://hdl.handle.net/10986/10228
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