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Most recent bank bailouts, from a financial and economic perspective, turn political. This paper seeks to frame ten effective implications/lessons of the most recent bank bailouts of 2007‐2009 in the Western economy model when analyzing actual shareholders' value retrenchment or growth opportunities.

The paper uses a literature review and a re‐conceptualized framework of event study methodology, secondary data analysis of qualitative and quantitative information.

Recent bank bailouts relate to: global bailout interconnections, economic downturn and liquidity boost, abnormal returns, efficiency recovery, evasion of social costs, new opportunities for M&A, new risk management applications, opportunistic investors and eventually patience. Most important, findings recommend shareholders to grasp opportunities for bargains from bailout banks as well as to harvest their existing investments. At the same time, economic education and control become another important solution.

Consequently, as the paper targets most recent bailouts, a still ongoing event, there is a need for extended financial data that could enhance some cause‐related solutions after economic recovery.

The practicality of the paper refers to guiding management of both government and financial institutions on the choice for reasoning bank bailouts, providing some critical thinking views to investors as well as academics.

Research or studies on the most recent financial crises bailouts have not yet been written, due to the process continuation. The novelty of the paper resides not in calculating ratios and interpreting them, but rather in looking more into some interesting strategic moves used to boost shareholders' value.

This paper aims to examine the characteristics of banks that were the target of intervention in the form of bailout or failure during the financial crisis and, of those subjected to intervention, what characteristics distinguish those that received bailout funds from those that were deemed failures.

The study estimates a series of logit regressions in an effort to identify the causes of regulatory intervention while controlling for bank-level characteristics and the economic and regulatory environment.

The empirical results indicate that many of the same characteristics associated with banks receiving bailout funds are similar to the characteristics associated with failed banks. However, non-performing loans increased the likelihood of failure, but reduced the likelihood of a bank receiving Capital Purchase Program (CPP) funds, suggesting that regulatory authorities discriminated in their use of CPP funds based on the quality of a bank’s asset portfolio. Further, those banks located in states with limits on de novo branching and those banks that are part of a multi-bank holding company structure were less likely to fail but were more likely to receive CPP funds.

This paper provides a comprehensive analysis of regulatory intervention in the banking industry during the late 2000s financial crisis and the impact of different banking organizational structures, economic circumstances, and financial fragility on the likelihood of a bank failing or receiving bailout funds.

This chapter analyses the causes and effects of the financial crisis that commenced in 2008, and it examines the dramatic government rescues and reforms. The outcomes of this, the most severe collapse to befall the United States and the global economy for three-quarters of a century, are still unfolding. Banks, homeowners and industries stood to benefit from government intervention, particularly the huge infusion of taxpayer funds, but their future is uncertain. Instead of extending vital credit, banks simply kept the capital to cover other firm needs (including bonuses for executives). Industry in the prevailing slack economy was not actively seeking investment opportunities and credit expansion. The property and job markets languished behind securities market recovery. It all has been disheartening and scary – rage against those in charge fuelled gloom and cynicism. Immense private debt was a precursor, but public debt is the legacy we must resolve in the future.

From a relational political brand perspective, newly elected governments are primarily concerned with maintaining the trust of the electoral coalition that brought them in office in order to secure their re-election. Hence, as Needham (2005) has suggested, governing parties tend to employ a political communication strategy aimed at promoting an effective brand consisted of six components: simplicity, uniqueness, reassurance, aspiration, values and credibility. In this context, this study examines the communication strategies of three Greek governments (PASOK, New Democracy and SYRIZA) in the period 2009–2019 that failed to be re-elected once they implemented the bail-out packages, against the six branding criteria. Following a qualitative methodological approach, this chapter analyses the key speeches of the respective prime ministers along with polling evidence and secondary data. It argues that all these three governments failed to be re-elected once they implemented the memoranda, not only because of the unpopular nature of the austerity measures but also because of their failure to fully retain their political brands in office since they hardly succeed to deliver on their promises, though it is unclear whether they employed self-consciously such a branding strategy.

Are firms able to time the market? The purpose of this paper is to focus on the study of own stock trading, emphasizing both repurchase and resell operations on the open market as well as over the counter.

The authors use data on 37,997 own stock transactions from 2005 to 2015 of Euronext Lisbon listed firms. Following Dittmar and Field (2015), this paper uses relative transaction prices to ascertain the relative performance of own stock transactions, in the open market and over the counter.

Results show that firms can time both repurchases as well as resales. Firms repurchase (resell) at lower (higher) prices than those prevailing in the market. Moreover, market-timing ability proves to be higher after the bailout period and to be influenced by the own stock trading frequency. Trading on the open market allows for increased timing ability for own stock repurchasing and reselling activity. Finally, results show seasonal effects both in repurchase and resale performance. Also, more efficient but less valuable firms are more likely to be successful in timing the market.

The authors study both the repurchasing and the reselling activity of the same set of firms, of already issued stock, using high-frequency (daily) data. In addition, the authors study own stock trading both in the open market and OTC, and also study the impact of a major economic shift on the firms’ ability to time the market.

The purpose of this paper is to highlight how the basic binomial option pricing model (BOPM) might be used by regulators to help formulate rules, prior to financial crisis, that help prevent loan overstatement by banks in emerging market economies undergoing financial crises.

The paper draws on the theory of soft budget constraints (SBC) to construct a simple model in which banks overstate loans to minimize losses. The model is used to illustrate how guarantees of bailout assistance (BA) (to banks) by crisis stricken countries’ financial authorities may encourage banks to overstate loans and delay the implementation of IFRS for loan valuation. However, the model also illustrates how promises of BA may be depicted as binomial put options which provide banks with the option of either: reporting loan values on poor projects accurately and receiving the loans’ liquidation values; or, overstating loans and receiving the guaranteed BA. An illustration is also provided of how authorities may use this representation to help minimize bank loan overstatement in periods of financial crisis. In order to provide an illustration of how the option value of binomial assistance may evolve during a financial crisis, the model is generalized to the Mexican financial crisis of the late 1990s. During this period, Mexican authorities’ guarantees of BA to the nation’s largest banks encouraged those institutions to overstate loans and delay the implementation of (previously adopted) international “best practices” based loan valuation standards.

Application of the model to the Mexican financial crisis provides evidence that, in spite of Mexico’s “official” 1997 adoption of international “best accounting practices” for banks, “iron clad” guarantees of BA by the country’s financial authorities to Mexico’s largest banks provided those institutions with an incentive to knowingly overstate loans in the late 1990s and early 2000s.

The model is compared against only one country in which the BA was directly infused into banks’ loan portfolios. Thus, as conceived, it is directly applicable to crisis countries in which the bailout took this form. However, the many quantitative variations of SBC models as well as recent studies which have applied the binomial model to other forms of bailout (e.g. direct purchases of bank shares by authorities) suggest that the model could be modified to accommodate different bailout scenarios.

The model and application show that guaranteed BA can be viewed as a put option and that ex-ante regulatory policies based on the correct valuation of the BA as a binomial option might prevent banks from overstating loans.

Use of the binomial or similar approaches to valuing BA may help regulators to determine the level of BA that will not encourage banks to overstate the value of their loans.

Recent research has used the BOPM to value, on an ex-post basis, the BA which appears on the balance sheet of institutions which have been rescued. However, little research has advocated the use of this type of model to help prevent, on an ex-ante basis, the overstatement of loans on poor projects.

The examination of the differential effects of bailout legislation on well‐capitalized versus under‐capitalized thrifts is the focus of this study. The study examines return responses for portfolios of thrift stocks, formed on the basis of capitalization, to news events concerning bailout funding leading up to and concluding with the President's signing of the Competitive Equality Banking Act of 1987 (CEBA). The results indicate thrifts react differently to legislative news events based on their capitalization levels. This is evidenced by 1) the presence of abnormal returns for portfolios of relatively well‐capitalized and relatively under‐capitalized thrifts, 2) the trends in the size of abnormal returns across well‐capitalized (under‐capitalized) portfolios as the average level of capitalization decreases (increases), and 3) the opposite signs of abnormal returns for relatively well‐capitalized versus relatively under‐capitalized portfolios.

The authors examine the Taiwanese government's budgetary responses to COVID-19, with a focus on the special budgets created for containing the virus, undertaking bailouts and providing economic stimulus. The authors assess the short-term and long-term fiscal implications of the budgetary measures and discuss how Taiwan's experiences could provide lessons for other countries for future emergencies.

The authors collect data from Taiwan's official documents and news reports and compare the special budgets proposed by the Taiwanese government during the Great Recession and the COVID-19 pandemic. The authors discuss lessons learned from the 2008–09 special budget and possible concerns of the 2020 special budgets. In the conclusions, the authors discuss potential long-term implications for Taiwan's budgetary system as well as possible lessons for other countries based on Taiwan's experiences

The authors found that the 2008–09 special budgets focused only on economic stimulus, whereas the 2020 special budgets covered COVID-19 treatments, bailouts and economic stimulus. In 2020, the Taiwanese government devised targeted bailout plans for industries and individuals most affected by the pandemic and created the Triple Stimulus Vouchers to boost the economy. Since the special budgets were largely funded through borrowing, the authors pointed out concerns for fiscal sustainability and intergenerational equity.

COVID-19 has changed how the world functions massively. This work adds to the literature on COVID-19 by providing Taiwan's budgetary responses to the pandemic. This work also identifies ways for Taiwan to improve the existing budgetary system and discusses lessons for other countries.

We discuss the ways in which the tensions between deregulation and bailouts create fundamentally inefficient markets. Although there is an appetite for the rhetoric of a laissez-fair economic system in the United States, we do not have the political will to operate such a system, as there are always cries for bailouts when a crisis emerges. And bailouts rob markets of the crucial ability to discipline capital for risky behavior. Using the case of China as an example, we argue that the post-Cold War conclusion that state ownership is fundamentally inefficient is premature. The key issue is not state versus private ownership per se but, rather, how well aligned the incentives are within a given system. Some of the economic models we find in reform-era China are actually better aligned and perhaps as transparent as their counterparts in the market economies of the capitalist West. Finally, because China is not caught up on the categorical assumption that private firms are efficient while state-owned firms are inefficient, the country has been able to be an institutional innovator in the area of public–private partnerships, leading to radical new corporate forms.