Delegation and Delay in Bank Privatization
dc.contributor.author | Ambrus-Lakatos, Lorand | en_US |
dc.contributor.author | Hege, Ulrich | en_US |
dc.date.accessioned | 2006-08-01T16:38:02Z | |
dc.date.available | 2006-08-01T16:38:02Z | |
dc.date.issued | 1998-07-01 | en_US |
dc.identifier.other | RePEc:wdi:papers:1998-181 | en_US |
dc.identifier.uri | https://hdl.handle.net/2027.42/39568 | en_US |
dc.description.abstract | The paper explains why bank privatization in transition economies is frequently delayed in comparison to privatizing non-financial firms. In the model, the government inherits a distressed bank with bad loans to a representative non-financial firm. The firm will only abstain from wasteful opportunistic behavior if there is a credible to signal that its future budget constraint will be hard. If the government takes over the state-owned bank directly or re-capitalizes and privatizes it immediately, then signaling leads to excessive liquidation. Delay in privatization allows delegating the signaling and can be beneficial because the signaling distortion can be shifted across "types". The analysis assumes a political constraint to sell the state-owned bank to a domestic investor (shallow pockets), but shows also that a Pareto improvement can typically be achieved if a buyer with a deep pocket can be found (foreign investor), Policy implications concerning timing and scope of bank privatization are discussed. | en_US |
dc.format.extent | 33 bytes | |
dc.format.extent | 3151 bytes | |
dc.format.extent | 1673405 bytes | |
dc.format.mimetype | text/plain | |
dc.format.mimetype | text/plain | |
dc.format.mimetype | application/pdf | |
dc.language.iso | en_US | en_US |
dc.relation.ispartofseries | 181 | en_US |
dc.subject | Bad Loans, Delegated Signing, Delayed Recapitalization | en_US |
dc.subject.other | G21, P21, P34, P41, P43 | en_US |
dc.title | Delegation and Delay in Bank Privatization | en_US |
dc.type | Working Paper | en_US |
dc.subject.hlbsecondlevel | Economics | en_US |
dc.subject.hlbtoplevel | Business | en_US |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/39568/3/wp181.pdf | en_US |
dc.owningcollname | William Davidson Institute (WDI) - Working Papers |
Files in this item
Remediation of Harmful Language
The University of Michigan Library aims to describe library materials in a way that respects the people and communities who create, use, and are represented in our collections. Report harmful or offensive language in catalog records, finding aids, or elsewhere in our collections anonymously through our metadata feedback form. More information at Remediation of Harmful Language.
Accessibility
If you are unable to use this file in its current format, please select the Contact Us link and we can modify it to make it more accessible to you.