At what point should a saver knowingly bear bank-credit risk?

It is hard to balance financial discipline against panic in the middle of a crisis. The episode highlights the trade-off between protecting taxpayers,...

A bail-in shifts part of failure costs toward claims within the banking system, but its economic effects depend on design. Shifting losses inward can ...

The resolution distinguished between protected and unprotected deposits, although the policy process generated intense uncertainty. A protected deposi...

What happens when banks become much larger than the state's apparent capacity to support them?

Iceland's subsequent adjustments should be assessed alongside their costs, not presented as an effortless model for every country. The recovery s...

The crisis affected depositors, households, government policy and the exchange rate in different ways. The impact on households and foreign depositors...

That scale makes the question of a credible backstop unavoidable. Their scale relative to the national economy created difficult questions about lende...

Did the models fail, or did the market stop behaving as the models assumed?

Its rescue arrangement was organized by private financial institutions following central-bank coordination, not a simple blanket government bailout. T...

Crowded exits can make individually reasonable strategies collide disastrously. The episode illustrated the possibility that individually rational pos...

Leverage magnified the impact of relatively small price changes and forced the firm toward difficult liquidation choices. Leverage turned relatively s...