Darvas, Zsolt.
There is an intense debate on the possibility of bailing-in bank shareholders and lenders of troubled financial institutions (ie forcing investors to take losses), or relying on taxpayers to take the hit. For example, in a recent debate Charles Goodhart from LSE argued against, while Matt King from Citi in favour of bailing-in. The main arguments against bailing-in, and therefore in favour of bailing-out from taxpayers’ money, are that otherwise investors would demand a higher return when investing in a bank, and lenders would flee at the first sign of trouble.
Πηγή: Bruegel