سجاد شرق

A bailout is the ex-ante or ex-post rescue by the government of a bank (or its creditors) liable to or in the position of illiquidity or insolvency through injecting base money or other fiscal or regulatory measures. Bailouts can be desirable or undesirable. But, in case of illiquidity, for the backstop of elastic money creation by banks, Bailouts are continuous and inevitable. And in case of systemic balance sheet insolvency, Bailouts are unavoidable. So, the legal framework of Bailouts should be consistent with stability-oriented and expansion-oriented goals.

Regulation and supervision of the banking system, especially on the asset side of the balance sheet, is necessary for the prevention of systemic bailouts. There are both micro-prudential and Macro-prudential dimensions to regulation and supervision. Portfolio restrictions and dividend limitations (including stock buyback limitations) are of great importance in micro-prudential regulation and supervision. In addition to structural regulation, countercyclical and sectoral instruments are of crucial importance in macroprudential regulation and supervision. Reform of governance rules, specially concerning shareholder limited liability and director and officer liability, can incentivize banks to limit risk-taking. Correct design of governance structure of supervisory agency, specially concerning independence and conflict of interest, creates the incentive structure for addressing crises. Bailouts for addressing liquidity crises through lender of last resort should be based mainly on the discount window and the real bills principle. There should be no deposit insurance coverage caps. Bailouts for addressing balance sheet insolvency should be in the forms of capital injections and non-performing asset purchases (quantitative easing).

laws of American and Iranian banking laws give to these questions?