| 来源类型 | Working Paper |
| 规范类型 | 报告 |
| DOI | 10.3386/w28341 |
| 来源ID | Working Paper 28341 |
| No-fault Default, Chapter 11 Bankruptcy, and Financial Institutions | |
| Robert C. Merton; Richard T. Thakor | |
| 发表日期 | 2021-01-18 |
| 出版年 | 2021 |
| 语种 | 英语 |
| 摘要 | This paper analyzes the costs and benefits of a no-fault-default debt structure as an alternative to the typical bankruptcy process. We show that the deadweight costs of bankruptcy can be avoided or substantially reduced through no-fault-default debt, which permits a relatively seamless transfer of ownership from shareholders to bondholders in certain states of the world. We show that potential costs introduced by this scheme due to risk shifting can be attenuated via convertible debt, and we discuss the relationship of this to bail-in debt and contingent convertible (CoCo) debt for financial institutions. We then explore how, despite the advantages of no-fault-default debt, there may still be a functional role for the bankruptcy process to efficiently allow the renegotiation of labor contracts in certain cases. In sharp contrast to the human-capital-based theories of optimal capital structure in which the renegotiation of labor contract in bankruptcy is a cost associated with leverage, we show that it is a benefit. The normative implication of our analysis is that no-fault-default debt, when combined with specific features of the bankruptcy process, may reduce the deadweight costs associated with bankruptcy. We discuss how an orderly process for transfer of control and a predetermined admissibility of renegotiation of labor contracts can be a useful tool for resolving financial institution failure without harming financial stability. |
| 主题 | Microeconomics ; Households and Firms ; Financial Economics ; Financial Institutions ; Corporate Finance ; Other ; Law and Economics ; Industrial Organization ; Firm Behavior |
| URL | https://www.nber.org/papers/w28341 |
| 来源智库 | National Bureau of Economic Research (United States) |
| 引用统计 | |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/586014 |
| 推荐引用方式 GB/T 7714 | Robert C. Merton,Richard T. Thakor. No-fault Default, Chapter 11 Bankruptcy, and Financial Institutions. 2021. |
| 条目包含的文件 | ||||||
| 文件名称/大小 | 资源类型 | 版本类型 | 开放类型 | 使用许可 | ||
| w28341.pdf（315KB） | 智库出版物 | 限制开放 | CC BY-NC-SA | 浏览 | ||
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