Olena Mykolenko

The aim of the study is to investigate substantial bases and mechanisms for institutional changes that facilitate the adjustment of an economic system to abrupt changes. To achieve this objective, comparative analysis is carried out in order to disclose different approaches to crisis management and resolution regimes following the financial imbalances in Denmark, Sweden, and the USA that represent three different models of institutional adaptation. Thus, the paper reflects on the multifaceted phenomenon of institutional change, evaluating the theoretical background, which is further adjusted to the concept of institutional adaptation. In turn, the concept of institutional adaptation is developed from crisis management and post-crisis financial policies’ perspective. Built on various resolution procedures, the main mechanisms behind institutional adaptation are highlighted: extension (extended authorities of traditional institutions that have been empowered with additional functions); limited creation (newly-created institutions with restricted opportunity to exercise their discretion); redeployment (utilized and redeployed traditional effective institutions in order to implement new resolution schemes); modified formation (newly-formed institutions that have been modified and adjusted); grafting (grafting the new appropriate elements onto statutory institutional frameworks); transfer (transfer of practices from other domains and markets), and rebuilding (rebuilding functional competences). It is proved that even though policy-makers draw on institutions and logic of actions originally established and developed before the need to respond to new circumstances, they adjust and redesign them to fit and produce a renewed action plan.