Bail-In
Rescuing a failing bank by making its own investors and large creditors take losses, instead of using…
In plain English
Rescuing a failing bank by making its own investors and large creditors take losses, instead of using taxpayer money.
In a bail-in, the people who lent to or invested in a bank pay for its rescue. Shareholders are wiped out first, then certain bondholders, and in extreme cases large uninsured depositors see part of their money converted or cut.
Cyprus in 2013 was the famous example, when big depositors lost a large share of balances above the insured limit. It is the opposite of a bailout, where outside money (often public) fills the hole.
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