Jump to ContentJump to Main Navigation
Connectedness and ContagionProtecting the Financial System from Panics$
Users without a subscription are not able to see the full content.

Hal S. Scott

Print publication date: 2016

Print ISBN-13: 9780262034371

Published to MIT Press Scholarship Online: January 2017

DOI: 10.7551/mitpress/9780262034371.001.0001

Show Summary Details
Page of

PRINTED FROM MIT PRESS SCHOLARSHIP ONLINE (www.mitpress.universitypressscholarship.com). (c) Copyright The MIT Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in MITSO for personal use.date: 30 June 2022

Standing Bailout Programs

Standing Bailout Programs

(p.279) 25 Standing Bailout Programs
Connectedness and Contagion

Hal S. Scott

The MIT Press

This chapter discusses standing bailout programs in the EU and Japan. In the EU, as a result of the eurozone crisis, and in Japan as a result of the lost decade, standing support programs have been created that can be used to bail out failing banks, and in the case of Japan nonbanks as well, in the future. In June 2012, the European Council agreed to create a banking union that would allow for centralized supervision by the European Central Bank (ECB) of large banks through the Single Supervisory Mechanism (SSM) and centralized resolution of euro area banks through the Single Resolution Mechanism (SRM). The EU also created a new permanent bailout mechanism in 2010, the European Stability Mechanism (ESM), primarily intended to bailout sovereigns. In Japan, the government has standing authority to use public funds to recapitalize solvent banks and solvent financial institutions. The Japanese government further has the authority to nationalize insolvent banks and to provide limited assistance to insolvent financial companies. The government is also permitted to nationalize an insolvent financial institution following a systemic risk determination.

Keywords:   financial policy, financial regulation, bailout programs, European Union, Japan, monetary policy, financial crisis

MIT Press Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.