bail-in

Editor's Note: The Eurogroup released the following statement moments ago in connection with the banking and sovereign debt crisis in Cyprus. The Eurogroup has reached an agreement with the Cypriot authorities on the key elements necessary…

Regarding Cyprus, recently I heard someone claim that depositors are not creditors of a bank despite the fact that deposits are bank liabilities. This is bollocks. Depositors are indeed creditors, particularly in Europe where they are…

As I indicated three months ago, the IMF now supports capital controls in specific and extraordinary circumstances, particularly in view of its experience in Iceland. This is now relevant given the situation in Cyprus. Matina Stevins of Dow…

The Cypriot banking system is insolvent. Heaping private losses onto taxpayers is bad public policy. Let's start with those two statements, because starting there makes clear that forcing losses onto bank creditors was the only choice in…

The latest news is the bank levy on small deposits could be lifted. As Ryan Avent just tweeted, it was insane in the brain to begin with, wasn't it?

The latest news out of Cyprus is that the Cyrpiot government has delayed the vote on a bank bailout and savers tax by one day to Monday and that it has also extended the bank holiday from just Monday to Tuesday as well. In my view, the news…

This morning we learned that after hours of tense negotiation, Europe has hammered out a 10bn euro "bailout" of Cyprus. I put the term bailout in quotes because the key feature of this deal is the bail-in of Cypriot depositors to the tune…

Below is the full text of the European' Commission's Memorandum of Understanding with Spain regarding the bailout of the Spanish banking sector released earlier today.

As I wrote regarding the Spanish bank bailout just now, large losses at European financial institutions likely mean that equity will be wiped out. Government will then need to decide how the losses will be paid for. In Spain's case, the…

In Spain, it is well-known that many of the financial institutions need more capital. However, the question is how much capital. Spain has run dubious quality stress tests that say the banks need less than 40 billion euros. Others believe…