Optimal design of bank bailouts: the case of transition economies

Article Abstract:

Banking regulations tend to focus on the prevention of crises, rather than how to tackle them. An analysis of bank bailouts shows that recapitalizations should be linked to bad debts being liquidated, and they should not involve buying subordinated bonds or preferred stock. The aim is to ensure that bad debts are declared and lending is prudent, and too tough measures can be counter-productive, while soft policies may lead banks to give a false impression of the size of their bad debt problems to gain a bigger recapitalization.

Commercial Banks, Commercial Banking, Banking Regulation, Banking industry, Management, Laws, regulations and rules, Banking law, Bankruptcy reorganizations, Bankruptcy reorganization

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On the employment effect of manning rules

Article Abstract:

Manning rules deal with how many employees work on a process or machine. Employment is likely to rise in relation to capital stock if labor unions bargain over such rules, at the level of the firm, unless there is an unrealistically high substitution elasticity between labor and capital. Labor unions as individual organizations may benefit from manning rules, while workers as a whole may not. There is also the welfare issue to be considered which arises from the impact of such rules on total output.

Labor Regulation & Services, Analysis, Labor law, Labor policy, Labor unions, Welfare economics

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Profit sharing, capital formation and the NAIRU

Article Abstract:

The impact of different remuneration systems on aggregate employment was reconsidered. It was observed that the switch from a fixed wage economy to a share economy resulted in lower aggregate unemployment. This finding contradicted conventional wisdom on the topic. An additional innovation made in the study was the allowance of an endogenous adjustment of capital stock. This made the analysis of equilibrium unemployment more appropriate.

Employment, Capital formation, Profit sharing

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