News Archive for June 2013
Dr Andrew Lilico writes that "bail-ins" that were until recently considered inconceivable and were hardly debated as an alternative strategy (except by economists) have now become the official policy of international banking regulators.
Bailing out banks, when they become financially distressed, creates "moral hazard". It destroys the incentives for banks to limit their risk-taking in the future and, in practical terms takes the banking sector - the main allocator of capital in the economy - out of the capitalist system.
His Article can be found on the City A.M. website: http://www.cityam.com/article/co-op-rescue-there-was-always-better-way-deal-bank-failure