There can only be two reasons for bank failures, namely – risks are misjudged; this happens due to negligent credit assessment on the part of a single bank; other institutions follow the decision (herd behavior; contagion); – risks are correctly identified; however, in an emergency, the state or others are expected to make good the debt (moral hazard). – See resolution mechanism, unified, bad bank, banking crisis, bank triage, bank rule, golden, bank will, crash, five hundred euro bill, moneylender of last resort, Hypo Real Estate bailout, IndyMac bankruptcy, liquidity pool, emergency liquidity assistance, Northern Rock debacle, role shuffling, banking, setback effect, soul massage, single master liquidity conduit, stability fund, European, subprime crisis, lemon trade.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/