Working Paper: NBER ID: w31066
Authors: Andrew Metrick; Paul Schmelzing
Abstract: U.S. and European banking institutions were hit by a wave of distress in March 2023. Policymakers on both sides of the Atlantic reacted with an array of interventions, some targeting individual institutions, others designed to shore up the banking sector as a whole. This paper contextualizes events using a new long-run database on banking-sector policy interventions over the last eight centuries. On that basis, recent actions have already been unusual in their policy mix and size – in the database, the vast majority of events with the same pattern of interventions ultimately evolved into “systemic” bank-distress episodes.
Keywords: No keywords provided
JEL Codes: G01
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| March 2023 banking interventions (G21) | systemic banking crisis (F65) |
| historical interventions (B15) | systemic distress episodes (H84) |
| intervention patterns (F55) | systemic risks (F65) |
| size of interventions (C90) | stability of the banking system (G21) |
| historical precedents (B15) | classification of crises as systemic (G01) |
| recent interventions (O36) | potential future economic costs (J17) |