00000nam 2200000za 4500 9.820192 CaOODSP 20221107143142 cr ||||||||||| 160629s2016 oncd ob f000 0 eng d CaOODSP eng eng fre n-cn--- FB3-5/2016-29E-PDF Schroth, Josef. Financial crisis interventions [electronic resource] / by Josef Schroth. [Ottawa] : Bank of Canada, c2016. iii, 41 p. Staff Working Paper, 1701-9397 ; 2016-29 "June 2016." Includes bibliographical references. This paper develops a model of an economy where bank credit supports both productive investment and individual consumption smoothing in the face of idiosyncratic income risk. Bank credit is constrained by bank equity capital. When policy-makers inject equity capital during financial crises, they trade off stimulating credit supply immediately against long-term distortions related to funding equity injections. I calibrate my model and show that the bank equity capital injection that maximizes average utilitarian welfare redistributes from the poor to the wealthy. While wealthy savers benefit immediately from an increased supply of safe assets, less affluent borrowers and savers suffer from long-term distortions. gccst Financial crisis gccst Banks gccst Policy Bank of Canada. Staff working paper (Bank of Canada) 1701-9397 ; 2016-29 (CaOODSP)9.806221 PDF 507 KB https://publications.gc.ca/collections/collection_2016/banque-bank-canada/FB3-5-2016-29-eng.pdf