12/18/2015 - Bank Bailin Rules Undermine Bank Depositor Confidence
The head of supervision at the central bank of Italy says the bail-in rules which impose losses on bank investors, bondholders & bank account holders if the bank needs to be rescued can undermine the confidence of small savers or investors in the banking system .. “The bail-in can exacerbate – rather than alleviate – the risks of systemic instability caused by the crisis of individual banks .. It can undermine confidence, which is the essence of banking; transfer the costs of the crisis from government at large to a smaller category of people no less worthy of protection – small investors, pensioners – who directly or indirectly invested in bank liabilities.”
