Admittedly, Cyprus is not the ideal poster child for bail-in as a crisis management tool.
FORBES: The Cyprus 'Bail-In' Exposes 'Too Big To Fail' As All Too Timid
Yet although the U.S. bail-out approach is generally defended, the Cypriot bail-in approach is generally opposed.
FORBES: Bankruptcies, Bail-Outs & Bail-Ins: The Good, Bad & Ugly Of Bank Failure Resolution
But Cyprus fears a bail-in could spark a withdrawal of funds from the country, making its economic situation worse.
Germany has pushed for depositors in Cypriot banks to help pay for the rescue, a process known as a "bail-in".
Later, his spokeswoman said his comments weren't intended to say that the Cypriot bank bail-in agreed by ministers should be a model for the future.
WSJ: Greek Stocks Slump; Investors Play Catch Up on Cyprus Worries
The euro zone has vacillated between ineffective bail-out and ineffective bail-in.
The European bail-in proposal was floated over a year ago and analysts waited anxiously for European authorities to release detailed rules about how it would work.
FORBES: The Cyprus 'Bail-In' Exposes 'Too Big To Fail' As All Too Timid
"We're in a world where bail-in is going to be the new normal in the euro area, " said Mujtaba Rahman, European director at the Eurasia Group.
But precisely the same arguments - for what is known as a "bail-in" by private-sector creditors - were put by liberal-market purists at the peak of the banking crises in Ireland and Spain.
But, if a bank subsequently has to be wound down and national governments can't afford to save it, tough Cyprus-style bank "bail-in" procedures would force losses on bank creditors, large depositors or both.
WSJ: In Cyprus Rescue, Germany Forged a New Vision for Bank Union
If a small and economically weak country has the courage to subject its two largest banks, whose activities account for much of its GDP, to the bail-in mechanism, there is no reason why the same process cannot be applied in the United States.
FORBES: The Cyprus 'Bail-In' Exposes 'Too Big To Fail' As All Too Timid
European policy makers are considering a host of proposals to eliminate implicit government guarantees, including a new resolution regime, turning some liabilities into bail-in debt that will automatically take losses, depositor-preference regimes that would subordinate unsecured bondholders, and U.K.-style plans to ring-fence certain activities.
Unlike the bail-out approach, the bail-in method is much closer to what is observed in a true bankruptcy proceeding: the petitioner is insolvent, so haircuts of some magnitude must be suffered by the relevant creditors, but no haircuts at all are imposed on the general public, which stands outside the courtroom and is not a party to the case at hand.
FORBES: Bankruptcies, Bail-Outs & Bail-Ins: The Good, Bad & Ugly Of Bank Failure Resolution
On joining the euro, the central-bank governor promised (with disarming modesty) that the position of Portugal inside the single currency would be like Mississippi's in the United States: imbalances that led to an IMF bail-out in 1977 and again in 1983 would be a thing of the past.
Whereas the financial-banking crisis in 2008-2009 saw the U.S. government enacting bail-outs, the financial-banking crisis in Cyprus in March-April saw the local government enacting bail-ins.
FORBES: Bankruptcies, Bail-Outs & Bail-Ins: The Good, Bad & Ugly Of Bank Failure Resolution
Russia's fifth largest bank, Bank of Moscow, has been given the biggest bail-out in Russian history.
The cheapest bail-out in the world, as he initially called it, turned into one of the costliest.
ECONOMIST: Ireland��s former finance minister dies, at just 52
They will also have to stump up for smaller bail-outs in industries such as construction and sugar.
ECONOMIST: The beginning of the end of the longest-ruling party | The
Still, next-door Latvia (which had an international bail-out in 2009) and Lithuania are eager to follow the Estonian example.
Spain is widely expected to apply for a bail-out in the near future.
ECONOMIST: The IMF needs to change tack if Spain asks for a bail-out
Since Greece's first bail-out in May 2010, the government has imposed austerity, increasing taxes so much that people can barely manage.
Several big bail-outs in recent months, of businessmen close to Mr Daim and the ruling party, have drawn ferocious public criticism.
ECONOMIST: Daim Zainuddin goes as Malaysia��s finance minister
Years of accumulated deficits, a bank bail-out in 1995, and punishing interest rates have swollen the national debt to a Greek-style 140% of GDP.
Yes, that is a guess (as are the various estimates for the ongoing costs of break-up and those of a bail-out in future years).
Although fewer than a fifth of Germans backed a Greek bail-out in April, almost half now support the Greek and Irish rescues, according to another poll.
Although it pointedly declined a bail-out in America, it has been happy to take grants and soft loans in Germany and Romania to develop an efficient engine.
Shabbiest of all has been the government's handling of executive bonuses at the Royal Bank of Scotland, which has been mostly owned by the state since its bail-out in 2008 (see Bagehot).
He never asked Congress directly for a bail-out in his testimonies before the House and Senate, but he was in the company of CEOs from the car, insurance and financial-services sectors who did.
In early 1999, Mr Flowers left for Japan on a hunch that this was where the biggest opportunities existed he had seen the tremendous amounts of money made by investors out of government-assisted bank bail-outs in Sweden, France and, especially, the United States.
Some in the party want to capitalise on growing Eurosceptic sentiment in Germany by voting against bail-out plans in parliament.
应用推荐