Hunting Depositor Risk In The Eurozone

“In the future, German Chancellor Angela Merkel said, ‘banks must save themselves.’
---Der Spiegel, April 1, 2013

“We strive to be the most respected Investor Relations team by delivering financial transparency and outstanding communication.”
--Deutsche Bank Investor Relations

Europe has solved the problem of failing banks dragging down their governments with the cost of bailouts. Henceforth, the costs of bank resolution will be borne by bank bondholders and depositors, instead of by German taxpayers.

This is a very clean solution to a complex problem. If the eurozone’s banking system were viewed as a contingent liability of Germany, Germany would no longer be rated AAA, since the potential ongoing bailout costs are enormous.