Problems in Resolving Bank Insolvency and Its Price
- Author Simeun Vilendečić
- Co-Author Jovo Vilende?i?, Srdjan Jovanovic
- DOI
- Country : Bosnia and Hercegovina
- Subject : Commerce
Keywords : Problematic bank, insolvency, bank crisis, transition countries, costs of failed banks, supervision
Abstract
We explore bank insolvency causes and manners of resolving them, based on recent history in three countries on Balkans, but also compare common issues that transition and developed countries share. In doing so, we analyze wide array of problems that lead to bank insolvency, and provide ideas on issues that must be considered in dealing with bank insolvency, looking at much wider scope than simply the bank itself. Our analysis shows that cost of failing banks is kept secret and very high. We find that government plays much more important role in handling bank insolvency than regulating bank industry. Our findings provide suggest that failed banks are too much of a cost for any economy, and that management of such problems can be significantly improved by considering all necessary areas in problematic bank resolution program
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