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By Thomas DUFRESNE, Consultant Manager Initio
During the financial crisis, political and financial authorities were back against the wall when facing the global deterioration of the financial sector. When a bank was about to default, two options were on the table : either let them fail with (often) unpredictable consequences on the financial and real economy, or rescue them using taxpayer money. The EU country members were not aligned in their choices, taking sometimes inconsistent decisions. In any case, when the second option was chosen, it resulted into durable reputational damage.
In the aftermath of crisis, the European Financial Stability Board worked on a better approach, trying to escape the “too big to fail” situation. It resulted in two...
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