There are two basic alternatives to bankruptcy for insolvent banks, each morally and practically inferior to bankruptcy: bail-ins and bailouts.

FORBES: Bankruptcies, Bail-Outs & Bail-Ins: The Good, Bad & Ugly Of Bank Failure Resolution

Several countries, including France and Spain, are asking for the right to completely exclude depositors from "bail-ins, " jargon for distributing losses during a restructuring.

WSJ: Brussels Beat: Another European Divide: Protecting the Depositors

Whereas the financial-banking crisis in 2008-2009 saw the U.S. government enacting bail-outs, the financial-banking crisis in Cyprus in March-April saw the local government enacting bail-ins.

FORBES: Bankruptcies, Bail-Outs & Bail-Ins: The Good, Bad & Ugly Of Bank Failure Resolution

He has published over 70 theoretical empirical and policy papers on international macroeconomic issues and co-authored the books Political Cycles: Theory and Evidence and Bailouts or Bail-ins?

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In contrast, advocates of bail-ins are justified in arguing that contagion is best contained when resolution costs are restricted to those parties most related to (or responsible for) a particular financial insolvency.

FORBES: Bankruptcies, Bail-Outs & Bail-Ins: The Good, Bad & Ugly Of Bank Failure Resolution

But with the calls for excluding even large depositors from bail-ins, it also underscores how governments aren't quite ready to hand off control over how to protect their voters' savings, even if it comes at the expense of these voters' taxes.

WSJ: Brussels Beat: Another European Divide: Protecting the Depositors