ECB paper finds US resolution authority has not solved too-big-to-fail problem

Euro sign, Frankfurt

A working paper published yesterday by the European Central Bank (ECB) has found that the creation of the US's new resolution authority has dampened risk-taking in many banks, but the largest still appear not to see the threat of resolution as credible.

Wishful thinking or effective threat? Tightening bank resolution regimes and bank risk-taking, by Magdalena Ignatowski and Josef Korte, uses the creation of the US Orderly Liquidation Authority (OLA) in 2010 as a "quasi-natural experiment", since

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