‘Legalized’ G20 Bank Bail-In Laws

From 2012

G20 – the world’s largest 19 national economies, including the USA, and the European Union together, a group of 20. Additionally, there are representatives of the International Monetary Fund (IMF) and the World Bank. The G20 finance ministers and central bank governors began meeting in 1999, at the suggestion of the G7 finance ministers in response to the financial crisis in the 1990s.

Bailin – restructuring of a financial institution on the brink of failure, by forcing its creditors and unsecured depositors to take losses on their holdings. It often gets regarded as a rescue of last resort to help a troubled financial institution’s ability to attract future business. A bail-in is different from a bail-out, which involves the rescue of a financial institution typically by government credit extensions into the failing private sector.

To possibly better address future bank failures, this G20 bank bail-in solution is now law.

It is a relatively newly signed supranational law and purportedly the brainchild of the IMF’s former managing director, Christine Lagarde. The same woman who is likely to become the head of the European Central Bank 2020s. Check out some of her staff’s notes when she was in charge of the International Monetary Fund.


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