Comparing Bank Bail Outs and Bail Ins - CEL Bites

Alex Mashinsky and Ron Deutsch (General Counsel) discuss how bank bail outs work compared with bail ins and where you can read up more on the topic. Our mission: To put unparalleled economic freedom in the hands of the people. Join the revolution, join Celsius and unbank yourself! Earn up to 15% APY on your digital assets and take out a loan starting at just 1% APR when using our Celsius wallet. Website → Twitter → YouTube → Instagram → Download the App Apple → Google → Become an ambassador TODAY. -----~-~~-~~~-~~-~--- Thank you for watching this video and don't forget to smash those LIKE & SUBSCRIBE buttons 👍 Not financial or tax advice. This channel is strictly educational and entertainment, provided for information purposes only. The videos on this channel are not investment, tax, or other professional advice nor a solicitation to buy or sell any assets or to make any financial decisions. Buying, holding, trading, and using digital assets involve significant risks....(read more)

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Banks are critical to the smooth functioning of a modern economy. They collect deposits from individuals and businesses and lend them to others who need them. However, like any other business, banks too can face financial difficulties, the consequences of which can ripple far beyond their individual balance sheets. So, when banks face a financial crisis, how should the government respond? Should it bail them out or bail them in? Bank bailouts refer to the instances where a government uses taxpayers' money to rescue a struggling bank. This is done by injecting funds into the bank or taking ownership of it, and then restructuring it to restore solvency and stability. During the 2008 global financial crisis, many governments around the world bailed out their banks to prevent a complete collapse of the financial system. The rationale behind this approach was to prevent the domino effect of bank failures that could lead to a wider economic recession. However, such bailouts have often been criticized as they reward the reckless behavior of bankers and shareholders, who have taken excessive risks without considering the long-term consequences. Moreover, they transfer the burden of the banks' mistakes from those who were responsible for them to the general public, who did not benefit from them. This creates moral hazard, where banks feel less accountable for their actions as they anticipate government intervention in case of a financial crisis. In contrast, bail-ins involve a bank regulator or resolution authority cancelling or reducing the value of shareholders' and creditors' claims on the bank, using their funds to recapitalize the bank. The goal of bail-ins is to make the stakeholders of the bank pay for their own mistakes, instead of relying on taxpayers' money. Bail-ins also ensure that losses are distributed fairly among stakeholders, depending on their shareholdings and liabilities, rather than being borne disproportionately by the taxpayers. Bail-ins were first implemented by the European Union in 2012 as a part of their banking union project. They were included in many countries' banking laws in the aftermath of the 2008 crisis, as a more sustainable and responsible alternative to bailouts. However, some critics argue that bail-ins could also have negative consequences, especially if they result in a bank run or damage the financial stability of the banking system. In conclusion, whether it's a bank bailout or a bail-in, there are pros and cons to both approaches. While bailouts may stabilize the banking system in the short term, they can create moral hazard and socialize losses. Bail-ins, on the other hand, may take a longer time to be effective and could lead to market instability. Ultimately, the choice of which approach to take depends on the specific situation and the severity of the crisis. https://inflationprotection.org/comparing-bank-bail-outs-and-bail-ins-cel-bites/?feed_id=86045&_unique_id=64329cbbb1325 #Inflation #Retirement #GoldIRA #Wealth #Investing #AlexMashinsky #Bitcoin #blockchain #celtoken #Celsiusnetwork #crypto #Cryptocurrency #defi #wallet #BankFailures #AlexMashinsky #Bitcoin #blockchain #celtoken #Celsiusnetwork #crypto #Cryptocurrency #defi #wallet