Activities per year
Abstract / Description of output
Many of the world’s developed economies have introduced, or are planning to introduce, bank bail-in regimes. Both the planned EU resolution regime and the European Stability Mechanism Treaty involve the participation of bank creditors in bearing the costs of bank recapitalization via the bail-in process as one of the (main) mechanisms for restoring a failing bank to health. There is a long list of actual or hypothetical advantages attached to bail-in centred bank recapitalizations. Most importantly the bail-in tool involves replacing the implicit public guarantee, on which fractional reserve banking has operated, with a system of private penalties. The bail-in tool may, indeed, be much superior in the case of idiosyncratic failure. Nonetheless, there is need for a closer examination of the bail-in process, if it is to become a successful substitute to the unpopular bailout approach. This paper discusses some of its key potential shortcomings. It explains why bail-in regimes will fail to eradicate the need for an injection of public funds where there is a threat of systemic collapse, because a number of banks have simultaneously entered into difficulties, or in the event of the failure of a large complex cross-border bank, except in those cases where failure was clearly idiosyncratic.
Original language | English |
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Pages (from-to) | 3-29 |
Journal | Journal of Financial Regulation |
Volume | 1 |
Issue number | 1 |
Early online date | 3 Feb 2015 |
DOIs | |
Publication status | Published - 1 Mar 2015 |
Keywords / Materials (for Non-textual outputs)
- Bank failures
- Bank bail-ins
- bailouts
- BRRD
- Orderly Liquidation Authority
- Dodd Frank
- Single Point of Entry
Fingerprint
Dive into the research topics of 'Critical reflections on bank bail-ins'. Together they form a unique fingerprint.Press/Media
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Research by Prof Emilios Avgouleas is highlighted in article on financial stability of banks within the EU
15/02/16
1 item of Media coverage
Press/Media: Research
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Research by Prof Emilios Avgouleas is highlighted in article on new rules governing banks
21/02/16
1 item of Media coverage
Press/Media: Research
Activities
- 1 Participation in workshop, seminar, course
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Banking and Regulation: The Next Frontier
Emilios Avgouleas (Speaker)
22 Jan 2015Activity: Participating in or organising an event types › Participation in workshop, seminar, course
Profiles
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Emilios Avgouleas
- School of Law - Chair in Banking Law
- Global Justice Academy
- Edinburgh Centre for Commercial Law
Person: Academic: Research Active