Partial nationalization of undercapitalized banks proposed in the wake of the financial crisis that followed the subprime crisis. According to this proposal, any institution that cannot find enough equity capital on the market to back – the balance sheet volume – with at least four percent equity capital on average over the last three years and – the risk-weighted assets with at least eight percent core capital, willy-nilly has to accept that the state replenishes the equity capital and becomes a shareholder. There has been much debate about the details of this proposal. – See resolution mechanism, unified, Bank Recovery Act, bank testament, Basel-III, Crisis Management Groups, capital adequacy, own funds, capital, core capital, minimum requirements for the design of recovery plans, moral hazard, emergency fund for crisis banks, stability fund, European, too big to fail principle, backing, asset levy, mandatory convertible bond.
Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent!
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/