Financial Stability News

News about financial stability and central banking

Failure is the only sure path to a safer financial system

This is an interesting post as we are drawing closer to crunch time in Europe. I agree in principle, but think it will be hard to imagine an orderly closure of any of the TBTF banks.

Meanwhile, the EU is churning on with its new crisis management directive, which will be out soon – here. From reading the early draft it doesn’t look too bad, sort of FDIC resolution type directive. So perhaps, if the real crisis can simmer for another year or so, the tools will be available for an orderly TBTF wind down?

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