, Columnist
Europe's Addiction to Bailing Out Banks
Effective regulation means letting some banks fail.
It's seen better days.
Photographer: Alessia Pierdomenico/Bloomberg via Getty ImagesThis article is for subscribers only.
Like repentant smokers, Europe's politicians have promised to quit bailing out banks. They're finding the habit hard to break.
The Italian government wants to rescue three banks which are struggling under the weight of non-performing loans. The trade-offs, as always, are complicated: financial stability now against financial stability later; shielding taxpayers from the costs of a rescue against protecting small investors from heavy losses. Yet the right balance can't mean saving every struggling bank every time.