Thursday, June 20, 2013

Making depositors take a haircut when a bank fails.

Nowadays it is sacrilege to suggest that depositors should take a hair cut when a bank fails: witness the rumpus in Cyprus a few months ago.
But it seems that it was generally accepted quite recently – in the early 1990s – that depositors SHOULD TAKE a hair cut when a bank fails. See this FT article – para starting “Sir Mervyn agrees…”. See here, or here or here.


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