Giudici Paolo, Laura Parisi, 28 August 2017

In the European single resolution framework, there are three potential paths for failing banks: bail-in, private intervention, or liquidation. This column proposes combining a new market-based early warning measure of credit risk based on CDS spreads to investigate potential losses and systemic contagion for each path. Applying this to Italy's banking system suggests that private intervention and a bail-in minimise losses compared to liquidation, and, bail-in slightly reduces contagion effects compared to private intervention.

Ester Faia, Beatrice Weder di Mauro, 30 April 2016

The default of key financial intermediaries like Lehmann Brothers, as well as the global banking panic following the 2007-2008 financial crises, set in motion the path for a fundamental restructuring of the global financial architecture. This column argues that the most pressing question has been how to design an efficient mechanism for resolution of significantly important banks. Bail-in, as opposed to bailout, has been the worldwide solution. But this presents issues for global banks, which must adhere to the rules in many different jurisdictions. 

Willem Buiter, Ebrahim Rahbari, 12 October 2010

CEPR Policy Insight No.51 explains how and why the fiscal crisis in the Eurozone came about and how it is likely to evolve during the rest of this decade.

The Editors, 12 October 2010

The saga of Greece’s public finances continues, and it is not the only country whose fiscal sustainability is in doubt. This column introduces a new Policy Insight by Willem Buiter and Ebrahim Rahbari that analyses the sovereign debt crisis in the Eurozone and the response of the national authorities, EU institutions, and IMF.

Marco Pagano, 17 October 2008

EU leaders have agreed on a bail-out plan but much is still unknown about its details. How will governments act as equity shareholders? Who will deal with cross-border banks? This column discusses the need for a Euro-area bank supervisory authority, as financial integration has outpaced regulatory integration.

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