Five Actions to Strengthen the Euro Area Banking Union
By Atilla Arda, Daniel Hardy, and Maike B. Luedersen
December 14, 2018
View of skyscrapers in the banking district in Frankfurt am Main, Germany: Progress has been made, but more needs to be done to strengthen the euro area’s banking union (photo: imageBROKER/Stefan Ziese/Newscom)
Dealing with problem banks in a prompt, efficient, and even-handed manner is essential for the European banking union. […]
How To Deal With Failed Banks
By Deniz Igan
July 3, 2018
Versions in Español, Português
Reforms since the global financial crisis have made bail-ins a credible option and bail-outs less likely (photo: iStock by Getty Images)
During the global financial crisis, policymakers faced a steep trade-off in handling bank failures. Using public funds to rescue failing banks (bail-outs) could weaken market discipline and lead to excessive risk taking—the moral hazard effect. […]