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Deposit guarantees were designed for one off failures of smallish banks, not systemic debt crises where large proportions of the total debt in a country is wort
by justincormack 14y ago
Deposit guarantees were designed for one off failures of smallish banks, not systemic debt crises where large proportions of the total debt in a country is worthless. None are trustworthy in this sense, but some countries are worse off than others. Cyprus has a bankrupt government with no access to debt.
- caf 14y agoThis is absolutely true - the deposit guarantee schemes are not a bottomless pit of money, and are nowhere near able to absorb the losses of a widespread series of cascading bank failures. It seems extremely unwise to publicise this fact, however - which is what this measure does.