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> The FSB’s plan supports a bail-in strategy, whereby shareholders and even debt holders would responsible for sharing the losses in the event of a bank downturn. Therefore in combination with other regulatory initiatives, it aims to promote greater market discipline, incentivizing creditors to enhance their monitoring of global systemically important banks’ risk-taking.
This is very dangerous territory they are heading into. A corrupt administration like the one we have now could draft legislation or policies with protocols requiring assets to remain above certain levels for the banks which if not met could result in forfeiture or being taken over and managed by another inept government agency. The FDIC already did this with thousands of banks across the U.S. as a result of the Fannie / Freddie Mac fiasco.