While statistical and artificial intelligence methods such as Artificial Neural Networks (ANN) have been used successfully to classify organizations in terms of solvency or insolvency, they are limited in degree of generalization either by requiring linearly separable variables, lack of knowledge of how a conclusion is reached, or lack of a consistent approach for dealing with local optimal sol...

This paper examines how public intervention (prudential policy) in the banking area should be pursued and aims at providing points for discussion in considering what kind of system should be established to promote both the efficiency and stability of banking functions. The basic thrust of the paper is that it is effective to utilize market mechanisms to improve the efficiency of banking functio...

The paper examines the main issues involved in translating domestic bankruptcy procedures to the sovereign context. It considers some of the principles by which domestic bankruptcy procedures operate, and the extent to which they apply to international lending. Two recent proposals are considered in more detail, that of Krueger (‘A New Approach to Sovereign Debt Restructuring’) and that of Pett...

In general, banks play a growth-enhancing role for the real economy. However, distorted incentives for banks, depositors, and regulators in connection with bank insolvency may corrupt banks' credit allocation and monitoring decisions, leading to suboptimal real economic outcomes. A rules-based prompt resolution regime for insolvent banks may reestablish the incentive system and provide for econ...

A. MENDES,* R. L. CARDOSO, P. C. MÁRIO, A. L. MARTINEZ AND F. R. FERREIRA a School of Electrical Engineering and Computer Science, The University of Newcastle, Callaghan, NSW, Australia b The Brazilian School of Public and Business Administration, Getúlio Vargas Foundation, Rio de Janeiro, RJ, Brazil c School of Economics, Federal University of Minas Gerais, Belo Horizonte, MG, Brazil d UNA Uni...