/ News, Research, Publication, Journal Article
The Credit Suisse bailout in hindsight: not a bitter pill to swallow, but a case to follow
Publication by Pascal Böni and Heinz Zimmermann in the Financial Markets and Portfolio Management Journal
It is now a year since Credit Suisse was bailed out in a state-orchestrated emergency merger with UBS, thereby abandoning the branding of an institution with a 167year history. Prof. Dr. Pascal Böni (Tilburg University, Netherlands) and Heinz Zimmermann (Universität Basel of Basel, Switzerland) critically evaluate the CS bailout, shedding light on key issues such as bailout-induced wealth transfers, the “too-big-to-fail” challenge, the likelihood of bank bailouts, the optimal level of bank equity, the doctrinal separation of solvency and liquidity, and the benefits of ex-ante market-based bank fragility indicators rather than ex-post accounting indicators.