Bank bailouts in Europe and bank performance

During the financial crisis, 114 European banks benefited from government support in Europe. We investigate the financial condition of banks before and after receiving state support using logit regressions. Our results indicate that the equity ratio, loan quality and bank size are the main determinants of bank bailout involvement. However, the aided banks hardly improve their performance indicators in the years following government aid, indicating that bailouts are not sufficient to restore bank health. (C) 2017 Elsevier Inc. All rights reserved.