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  Valuation reports in the context of banking resolution: What are the challenges?

Hellwig, M. (2018). Valuation reports in the context of banking resolution: What are the challenges?

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Item Permalink: http://hdl.handle.net/21.11116/0000-0001-A736-6 Version Permalink: http://hdl.handle.net/21.11116/0000-0002-FF33-6
Genre: Paper

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 Creators:
Hellwig, Martin1, Author              
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1Max Planck Institute for Research on Collective Goods, Max Planck Society, ou_2173688              

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Free keywords: Bank resolution, valuation, no-investor-worse-off principle, Banco Popular Español
 JEL: G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages
 JEL: G28 - Government Policy and Regulation
 JEL: G33 - Bankruptcy; Liquidation
 Abstract: The paper discusses the problem of valuation in bank resolution. In an overview over the most relevant principles of valuation theory, the paper notes the difficulties inherent in valuing risks and illiquidity in holding non-traded assets. Subsequently, the paper briefly reviews the resolution of Banco Popular Español, and then discusses the need for clarification of the no-investor-worse-off principle, the relation between the price in a sale of business and the presumed outcome in an insolvency procedure, and the difficulties attached to assessing the value of an illiquid asset that is held. The paper concludes with a discussion of the need for time, for valuation and in resolution, warns against a moratorium on withdrawals and payouts, and argues that time pressures would be much reduced if funding in resolution was provided for.

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 Dates: 2018
 Publication Status: Published online
 Pages: -
 Publishing info: Bonn : Max Planck Institute for Research on Collective Goods
 Table of Contents: -
 Rev. Type: -
 Identifiers: Other: 2018/06
 Degree: -

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