Bailouts or Bail-Ins?
Nouriel Roubini and Brad Setser
The phrase `liquidity crisis' is firmly in the headlines these days. For instance, `Liquidity crisis grows as Libor rates gap hits 20-year high,' reports Telegraph.co.uk, 6 hours ago, at the time of writing. "Liquidity crisis could spark $43 billion `firesales'," cautions Financial Times. And an article in Forbes wonders, `Liquidity crisis or credit crunch?'
As you may be aware, central bankers across the globe have been battling the crisis and pumping in money to keep the finance engine running. "It is easy to say that the provision of official liquidity is the right response to a liquidity crisis. It is much harder to answer the question of how much liquidity is needed," write Nouriel Roubini and Brad Setser in Bailouts or Bail-Ins? (http://www.vivagroupindia.com/).