Patrick Honohan, 30 October 2020

With the knock-on financial impact of the Covid pandemic, it is likely that several countries could soon face macro-financial crises, with investors rushing for the exit (as in Lebanon, where a crisis is already well underway). Currency devaluation, capital controls, and bail-in are the main tools available to national financial authorities, but there is no universally agreed playbook. This column contrasts the post-Global Crisis recovery experiences of Cyprus, Iceland, and Ireland – each of them over-banked like Lebanon – and shows how different the mixture of these tools used in handling such country crises have been.

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