Rules versus Discretion: A Comment

1965 ◽  
Vol 73 (2) ◽  
pp. 170-172 ◽  
Author(s):  
Richard Attiyeh
Keyword(s):  
Rules Versus Discretion

RULES VERSUS DISCRETION: A SIMULATION STUDY

1973 ◽  
Vol 28 (4) ◽  
pp. 853-865 ◽  
Author(s):  
Richard H. Puckett ◽  
Susan B. Vroman
Keyword(s):  
Simulation Study ◽  
Rules Versus Discretion

Rules versus Discretion in Bank Resolution

2020 ◽  
Vol 33 (12) ◽  
pp. 5594-5629 ◽  
Author(s):  
Ansgar Walther ◽  
Lucy White
Keyword(s):  
Private Information ◽  
Optimal Policy ◽  
Financial Crises ◽  
Public Information ◽  
Time Inconsistency ◽  
Bank Resolution ◽  
Public Signals ◽  
Rules Versus Discretion

Abstract Recent reforms have given regulators broad powers to “bail-in” bank creditors during financial crises. We analyze efficient bail-ins and their implementation. To preserve liquidity, regulators must avoid signaling negative private information to creditors. Therefore, optimal bail-ins in bad times only depend on public information. As a result, the optimal policy cannot be implemented if regulators have wide discretion, due to an informational time-inconsistency problem. Rules mandating tough bail-ins after bad public signals, or contingent convertible (co-co) bonds, improve welfare. We further show that bail-in and bailout policies are complementary: if bailouts are possible, then discretionary bail-ins are more effective.

scholarly journals RULES VERSUS DISCRETION IN FISCAL POLICY*

2011 ◽  
Vol 80 (5) ◽  
pp. 603-629 ◽  
Author(s):  
CARLUCCIO BIANCHI ◽  
MARIO MENEGATTI
Keyword(s):  
Fiscal Policy ◽  
Rules Versus Discretion
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