Bank Recapitalisation: Bail-out or Bail-in
Author Sashi Sivramkrishna Abstract Using sectoral T-accounts, this paper analyzes the implications of bank bail-outs and bank bail-ins. Contrary to popular opinion, bank bail-outs do not utilize taxpayers’ money. Moreover, bank bail-outs funded through recapitalization bonds or deficit financing and bail-ins have similar net effects on sectoral balance sheets. There are, however, questions of moral Read More …