Faculty of Economics and Business Administration Publications Database

The Bail-in Puzzle

Pages: 1 - 2
Month: January
Link External Source: Online Version
Year: 2011

Bail-in has become the favorite focal point, or rather the favorite provocative term in the policy debate about bank rescue programs in Europe. For instance, over the past few weeks, the German government has insistently requested a substantial participation of the private sector in any further debt restructuring. Others, like the President of the European Central Bank have vigorously opposed any step towards a true bail-in. Likewise, most European governments and some prominent economists have warned of the devastating consequences a spreading of default expectations would have on the financial stability of the European banking system.