One year earlier than required, the German government approved plans to force creditors into propping up struggling banks across Europe. As WSJ reports, Germany "leads the way" in Europe by implementing European rules quickly and "creates instruments that allow the winding-down of big systemically relevant institutions without putting the financial stability at risk." What this means is that taxpayers (theoretically) will not be on the hook (though in reality we are sure the mutually assured destruction defense will be played - especially if Deutsche runs into problems) but as German authorities explain, "This ensures that in times of crisis mainly owners and creditors will contribute to solving the crisis, and not taxpayers." As a gentle reminder - creditors includes depositors... remember Cyprus?
As WSJ reports, Germany's cabinet Wednesday approved plans to force creditors into propping up struggling banks beginning in 2015