The Real Effects of Financial Sector Interventions During Crises

Mar 01, 2011 | L. Laeven, F. Valencia | IMF
This paper contributes to the literature on financial frictions and their macroeconomic importance. The authors focused on supply-side credit market frictions and looked at the real effects of financial sector recapitalization policies implemented by numerous countries during the height of the crisis. In pursuing this analysis, they collected new and comprehensive cross-country data on resolution policies that capture the intensity of government measures across countries, allowing them to quantify their economic importance, unlike previous studies that examined the effectiveness of resolution policies using a binary approach.