The EDGE Database: Shedding Light on the Estimated Costs of Assisting Distressed Corporations

Understanding the True Costs of Future Corporate Bailouts

Future debates about whether to assist distressed corporations, including New York Community Bank, could be better informed by more educated guesses about costs. During the 2008 financial crisis, interim Assistant Secretary of the Treasury for Financial Stability Neel Kashkari reportedly asked about a trillion-dollar rescue package to prop up distressed corporations.

The EDGE Database: Estimates and Insights

• Provides preemptive cost estimates for aiding distressed corporations
• Utilizes Nobel laureate Robert Merton's option theory insights
• Relies on data inputs including total debt, market capitalization, and volatility estimates

This information can assist in understanding the potential costs of future corporate bailouts and their impact on taxpayers and the economy.