I agree that bailouts, especially when shareholders and bank management are not penalised, create moral hazard that may feed subsequent reckless management behaviour down the road. The difficult judgment is of course to navigate in a general financial crisis between the Scylla of moral hazard and the Charybdis of financial collapse.
4  BIS central bankers’ speeches  The second aspect I wish to highlight is that by avoiding the commitment of public money and protecting tax payers as much as possible – a goal widely shared –participant countries in the Banking Union must shed considerable sovereign power, showing a remarkable willingness to continue to deepen European integration, thus reinforcing monetary union.