ces papers - open forum # 8, 2012
How much leeway did governments have in designing bank bailouts and deciding on the height of intervention
during the 2007-2009 nancial crisis? This paper analyzes comparatively what explains government responsesto banking crises. Why does the type of intervention during nancial crises vary to such a great extent acrosscountries? By analyzing the variety of bailouts in Europe and North America, we will show that the strategiesgovernments use to cope with the instability of nancial markets does not depend on economic conditions alone.Rather, they take root in the institutional and political setting of each country and vary in particular according tothe different types of business-government relations banks were able to entertain with public decision-makers.Still, “crony capitalism” accounts overstate the role of bank lobbying. With four case studies of the Irish, Danish,British and French bank bailout, we show that countries with close one-on-one relationships between policy-makers and bank management tended to develop unbalanced bailout packages, while countries where banks havestrong interbank ties and collective negotiation capacity were able to develop solutions with a greater burdensharing from private institutions.
is Associate Professor at Sciences Po Paris, email@example.com.
is a Senior Research Fellow at Sciences Po Paris and directs a junior research group at the MaxPlanck Institute for the Study of Societies, Cologne, firstname.lastname@example.org.