Meaning
A bail-in is a financial resolution method making a failing bank’s creditors and large depositors absorb losses.Definition
This mechanism mandates converting a troubled bank’s debt into equity or writing down claims, forcing shareholders and creditors to recapitalize the institution.How It Works
Regulators utilize the bank’s own capital, debt holders’ funds, and large deposits to restore its health, avoiding public funds.Purpose
To ensure financial stability and protect taxpayers by having investors bear the costs of failure.Author
