TY  - RPRT
A1  - Krahnen, Jan Pieter
T1  - The bail-in puzzle
T2  - Policy Platform - Policy Letter
N2  - Under the current conditions of a global financial crisis, notably in Europe’s banking industry, the governance role of bond markets is defunct. In fact, investors have understood that bank debt will almost always be rescued with taxpayers’ money. The widespread practice of government-led bank bailouts has thus severely corrupted the bond market, leading to the underestimation of risk and, as a consequence, the destruction of market discipline. Any feasible solution to the bank-debt-is-too-cheap problem will have to re-install true default risk for bank bond holders.
KW  - debt restructuring
KW  - financial stability
KW  - bank bonds
Y1  - 2011
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/34154
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-341548
UR  - http://safe-frankfurt.de/de/policy-center/publikationen/details/article/the-bail-in-puzzle.html
PB  - SAFE
CY  - Frankfurt am Main
ER  -