Probabilistic causality and decisions on bailouts of financial institutions

Research output: Contribution to journalArticlepeer-review

Abstract / Description of output

This paper uses probabilistic causality measures to support decisions about bailouts of financial institutions in non-crisis periods. The model suggested is simple and can easily be applied by practitioners. The approach is tested with daily market-based data of six large UK financial institutions. Contrary to what many experts claim, this study shows evidence that rescuing financial institutions is not always needed in order to prevent systemic crises.
Original languageEnglish
Pages (from-to)201-212
Number of pages12
JournalJournal of Risk Management in Financial Institutions
Issue number2
Publication statusPublished - 1 Mar 2017

Keywords / Materials (for Non-textual outputs)

  • bailouts
  • systemic risk
  • systemically important institutions
  • probabilistic causality


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