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As early as 2009, Reinhart and Rogoff (2009) pointed out that "recessions surrounding financial crises are usually long compared to normal recessions". Their research highlights surprisingly large declines in output, slow recoveries, and large and persistent negative effects on unemployment, public debt, and fiscal deficits in the aftermath of banking crises. The subsequent experiences in the US and particularly in western Europe lend further support to their findings. This naturally leads to the question of whether intervention to help distressed banks early.....
