Optimal Bail-Out, Conditionality and Creative Ambiguity

摘要: This paper addresses the issue of optimal behaviour Lender Last Resort (LOLR) in its microeconomic role regarding individual financial institutions distress. It has been argued that LOLR should not intervene at level and let any defaulting institution face market discipline, as it will be confronted with consequences risks taken. By considering a simple cost benefit analysis we show this position may lack sufficient foundation. We establish that, instead, under reasonable assumptions, policy to conditional on amount uninsured debt issued by bank.Yet equilibrium, because rescue is costly, all banks fulfill requirement condition, but follow mixed strategy. interpret confirmation 'creative ambiguity' principle, perfectly line central bankers claim efficient for them have discretion lending institutions. Alternatively, other cases, when social bank's bankruptcy too high, bail out institution, gives support 'too big fail' policy.