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Are Bank Bailouts Welfare Improving?

2025· preprint· en· W3213235352 on OpenAlex
Malik Shukayev, Alexander Ueberfeldt

Why this work is in the frame

A frame that forgets how it found something cannot be audited. These are the routes that admitted this work.

affAt least one author lists a Canadian institution in the pinned OpenAlex snapshot.
fundA Canadian funder is recorded on the work.

Bibliographic record

VenueEuropean Economic Review · 2025
Typepreprint
Languageen
FieldEconomics, Econometrics and Finance
TopicBanking stability, regulation, efficiency
Canadian institutionsGovernment of CanadaBank of CanadaUniversity of Alberta
FundersSocial Sciences and Humanities Research Council of Canada
KeywordsWelfareCapital requirementEconomicsFinancial crisisRecessionFinancial intermediaryBalance sheetIncentiveCapital adequacy ratioCapital (architecture)Ex-anteBasel IIIFinancial systemBusinessFinanceMonetary economicsMacroeconomicsMarket economy

Abstract

fetched live from OpenAlex

We assess the welfare benefits of government-funded emergency support to the financial sector, considering its effects on the probability of financial crises. In our quantitative general equilibrium model, the financial crisis probability depends on household portfolio choices and on financial intermediaries' balance sheet positions, both influenced by capital adequacy constraints (CAR) and ex-ante known emergency support provisions. The welfare-optimal CAR balances the output costs of equity financing and financial stability gains and ranges from 12.7 to 12.8 \% depending on emergency support. Comprehensive support is welfare improving under the current and optimal CAR, but likely welfare decreasing at lower ratios, or with a significant amount of shadow banking activity undermining the effectiveness of capital adequacy regulation.

Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.

Full frame distilled prediction

Teacher imitation

Not calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.

metaresearch head score (Codex)0.003
metaresearch head score (Gemma)0.001
Version: codex-gemma-dda1882f352aValidation status: machine_predicted_unvalidated
Candidate categoriesMeta-epidemiology (narrow), Insufficient payload (model declined to judge)
Consensus categoriesInsufficient payload (model declined to judge)
DomainCandidate signal: none · Consensus signal: none
Study designCandidate signal: Not applicable · Consensus signal: none
GenreCandidate signal: Empirical · Consensus signal: none
Teacher disagreement score0.758
Threshold uncertainty score0.999

Codex and Gemma teacher scores by category

CategoryCodexGemma
Metaresearch0.0030.001
Meta-epidemiology (narrow)0.0010.001
Meta-epidemiology (broad)0.0020.001
Bibliometrics0.0000.000
Science and technology studies0.0000.000
Scholarly communication0.0000.000
Open science0.0020.002
Research integrity0.0000.001
Insufficient payload (model declined to judge)0.0030.006

Machine scores (provisional)

The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.

Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.

Opus teacher head0.033
GPT teacher head0.248
Teacher spread0.215 · how far apart the two teachers sit on this one work
Validation statusscore_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it