Financial and Economic Review, Vol. 13, Issue 4, pp. 86-99, 2014
14 Pages Posted: 5 Apr 2016
Date Written: November 10, 2014
Although bail-outs helped contain the financial crisis in 2008, making bail-outs the norm would undermine the public finances and sow the seeds for future crises. To prevent this, policymakers are reforming resolution at both the global and European level. This will assure that banks can fail without significant disruption to financial markets or the economy at large with shareholders and creditors, not taxpayers, bearing the cost. That in turn will improve market discipline and reinforce regulatory and supervisory measures to enhance financial stability.
Keywords: banking, resolution, regulation, bail-in, financial stability
JEL Classification: H12
Suggested Citation: Suggested Citation