The comments are notable as they are the first time that a central bank official in the EU, and indeed, internationally has voiced concerns about the coming bail-in regime and the impacts on ordinary citizens — small businesses, investors, savers and pensioners… Central bank supervisor, Barbagallo is an interesting character in that he does not appear to be your typical central banker — most of whom today seem to be career bankers with Goldman Sachs and other Wall Street or City of London bankers. Indeed, his background is as a worker who rose through the ranks to become a senior trade union official.
The ramifications of bail-ins have not been thought through. With central banks taking unprecedented measures ostensibly to fight deflation, it is important to realise that bail-ins would create massive deflation as they would impact hugely on consumer, investor and business confidence.