The American people are clearly upset about the massive government bailouts of faltering organizations and the consequent commitment of taxpayer dollars-as well as the heavy involvement of the federal government in private sector activities. How do we approach a problem of this magnitude? The key question, which George Shultz presents at the outset, is: How do we make failure tolerable? In other words, if clear and credible measures can be put into place that convince everybody that failure will be allowed, then the expectations of bailouts will recede and perhaps even disappear. Perhaps more important, we would also get rid of the risk-inducing behavior that even implicit government guarantees bring about. In Ending Government Bailouts as We Know Them, a team of expert contributors examine the dangers of continuing government bailouts and offer constructive alternatives designed to both resolve the current bailout problem and prevent future crises.

The other contributors follow up on Shultz's premise with discussions on a range of key topics. They begin with the nature of systemic risk-particularly in the experience of the Lehman Brothers bankruptcy-and the reforms that financial firms can implement, whether or not required by government regulatory agencies. They also explore in detail the two main alternatives to government bailouts in the case of a failing financial firm: bankruptcy versus resolution authority. The book concludes with a summary of the commentary on the chapters by formal discussants and the audience at the conference, ranging from constructive critiques to strong endorsements to ideas for future research.

For more information or to place an order, please visit the Hoover Institution Press website at http://www.hooverpress.org/productdetails.cfm?PC=1362.

To read the book online in PDF format, click on the links below. This publication is copyright © 2010 by the Board of Trustees of Leland Stanford Junior University. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission of the publisher.

• Ending Government Bailouts As We Know Them TOC (Ending_Government_Bailouts_TOC.pdf ~700 KB)
• Preface (Ending_Government_Bailouts_as_We_Know_Them_ix.pdf ~702 KB)
• Acknowledgments (Ending_Government_Bailouts_as_We_Know_Them_xiii.pdf ~698 KB)
• Make Failure Tolerable (Ending_Government_Bailouts_as_We_Know_Them_3.pdf ~690 KB)
• Financial Reforms to End Government Bailouts as We Know Them (Ending_Government_Bailouts_as_We_Know_Them_11.pdf ~694 KB)
• Fifty Years in the Business: From Wall Street to the Treasury and Beyond (Ending_Government_Bailouts_as_We_Know_Them_21.pdf ~713 KB)
• Defining Systematic Rish Operationally (Ending_Government_Bailouts_as_We_Know_Them_33.pdf ~749 KB)
• Lessons Learned from the Lehman Bankruptcy (Ending_Government_Bailouts_as_We_Know_Them_59.pdf ~798 KB)
• A Contractual Approach to Restructuring Financial Institutions (Ending_Government_Bailouts_as_We_Know_Them_109.pdf ~729 KB)
• Wind-down Plans as an Alternative to Bailouts: The Cross-Border Challenges (Ending_Government_Bailouts_as_We_Know_Them_125.pdf ~836 KB)
• Wind-down Plans, Incomplete Contracting, and Renegotiation Risk: Lessons from Tiger Woods (Ending_Government_Bailouts_as_We_Know_Them_163.pdf ~705 KB)
• Expanding FDIC-Style Resolution Authority (Ending_Government_Bailouts_as_We_Know_Them_179.pdf ~697 KB)
• The Kansas City Plan (Ending_Government_Bailouts_as_We_Know_Them_189.pdf ~1064 KB)
• Chapter 11F: A Proposal for the Use of Bankruptcy to Resolve Financial Institutions (Ending_Government_Bailouts_as_We_Know_Them_217.pdf ~762 KB)
• Evaluating Failure Resolution Plans (Ending_Government_Bailouts_as_We_Know_Them_253.pdf ~696 KB)
• A Summary of the Commentary (Ending_Government_Bailouts_as_We_Know_Them_263.pdf ~719 KB)
• A Conversation about Key Conclusions (Ending_Government_Bailouts_as_We_Know_Them_285.pdf ~690 KB)
• Appendix: The Financial Crisis: Causes and Lessons (Ending_Government_Bailouts_as_We_Know_Them_291.pdf ~742 KB)
• About the Authors (Ending_Government_Bailouts_as_We_Know_Them_313.pdf ~695 KB)
• Index (Ending_Government_Bailouts_as_We_Know_Them_323.pdf ~709 KB)
• Entire book in one PDF (EndingGovtBailouts.pdf ~2475 KB)