TY  - UNPD
A1  - Götz, Martin
A1  - Krahnen, Jan Pieter
A1  - Tröger, Tobias
T1  - Taking bail-in seriously - the looming risks for banking policy in the rescue of Monte Paschi di Siena
T2  - SAFE policy letter series ; 54
N2  - According to the Bank Recovery and Resolution Directive (BRRD), introduced as a lesson from the recent financial crisis, the losses a failing bank incurred should generally be borne by its investors. Before a minimum bail-in has occurred, government money can only be injected in emergency cas-es to remedy a serious disturbance in the economy and to preserve financial stability. This policy letter argues that in case of the Italian Bank Monte dei Paschi di Siena (MPS), which the Italian gov-ernment currently plans to bail out, a resolution would most likely not cause such a systemic event. A bailout contrary to the existing rules will lead to a mispricing of bank capital and retard the re-structuring of the European banking sector, the authors write. They appeal to the European Central Bank, the Systemic Risk Board and the EU Commission to follow the rules as the test-case MPS will have a direct impact on the credibility of the new BRRD regime and the responsible institutions.
T3  - SAFE policy letter - 54 
KW  - BRRD
KW  - banking resolution
KW  - banking supervision
KW  - SRM
KW  - financial stability
KW  - systemic risk
Y1  - 2017
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/44001
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-440017
UR  - http://safe-frankfurt.de/de/policy-center/publikationen/detailsview/publicationname/taking-bail-in-seriously.html
IS  - February 10, 2017
PB  - SAFE
CY  - Frankfurt am Main
ER  -