Varieties of Helping Capitalism: Politico-Economic Determinants of Bank Rescue Packages in the EU During the Recent Crisis

Socio-Economic Review Volume 9, Number 4 (2011), 639-671, doi:10.1093/ser/mwr009

33 Pages Posted: 20 Sep 2014

See all articles by Beat Weber

Beat Weber

Oesterreichische Nationalbank (OeNB)

Stefan W. Schmitz

Oesterreichische Nationalbank (OeNB); Vienna Circle Society

Date Written: May 4, 2011

Abstract

This article explores the determinants of bank rescue packages in the European Union during the recent financial crisis. Despite the common EU framework, member states had room for manoeuvre with respect to the size and structure of bank rescue packages as well as the conditions attached to the measures. There are inherent conflicts between different objectives of bank rescue packages, therefore their design involves choices and impacts the distribution of income and wealth. Using data for the size of national bank rescue packages, a novel approach to measure generosity of the conditions attached, and an index of credit supply requirements, we explore the possible determinants of the underlying choices. Building on and investigating hypotheses from political economy and the Varieties of Capitalism literatures, we analyse economic, political and institutional factors contributing to differences among national approaches to crisis intervention.

Keywords: bailout, banks, financial markets, financialization, financial crisis, Europe, varieties of capitalism

JEL Classification: E44, G01, P16

Suggested Citation

Weber, Beat and Schmitz, Stefan W., Varieties of Helping Capitalism: Politico-Economic Determinants of Bank Rescue Packages in the EU During the Recent Crisis (May 4, 2011). Socio-Economic Review Volume 9, Number 4 (2011), 639-671, doi:10.1093/ser/mwr009, Available at SSRN: https://ssrn.com/abstract=2483836

Beat Weber (Contact Author)

Oesterreichische Nationalbank (OeNB) ( email )

Otto-Wagner-Platz 3, PO Box 61
Vienna,
1010 Vienna, A-1011
Austria

Stefan W. Schmitz

Oesterreichische Nationalbank (OeNB) ( email )

Otto-Wagner Platz 3
POB 61
Vienna 1011
Austria

Vienna Circle Society ( email )

Spitalgasse 2-4, Court 1
Vienna, 1090
Austria

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