Nowadays it
is sacrilege to suggest that depositors should take a hair cut when a bank
fails: witness the rumpus in Cyprus a few months ago.
But it seems
that it was generally accepted quite recently – in the early 1990s – that depositors
SHOULD TAKE a hair cut when a bank fails. See this FT article – para starting “Sir
Mervyn agrees…”. See here, or here or here.
.
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