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Question: Are UK Regulatory Authorities Justified in Supporting Troubled
Banks? An Evaluation of the Northern Rock Failure 2007-2008.
Answer: Using the multiple case study methodology, this study examines the post banking crisis cost of the Scandinavian and Japanese bank failures in order to ascertain the justification for lender of last (LLR) resort intervention by the UK regulatory authorities to the Northern Rock. The study further investigates the qualitative causal mechanisms of bank failure, authority and regulatory prescriptions and post crisis economic costs in terms of GDP and welfare loss in both systemic events. Attention is also focused on moral hazard and the regulators dilemma given the wider conflicting exegesis in the academic and practitioner led literature surrounding liquidity intervention. The study further focuses on the rationale of banking regulation in consideration of ‘contagion’, systemic financial collapse, bank engagement in economies, and market failure to gain perspective on the subject.....(short extract)
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- Subject: Business and Management
- Course: Accountancy and Finance
- Level: Degree
- Year: 2nd/3rd
- Mark: 77%
- Words: 14320
- Date submitted: March 12, 2009
- Date written: April, 2008
- References: Yes
- Document type: Dissertation
- Essay ID: 949
