We can apply the same logic to public finances. There too, the first step is to ensure that governments no longer run into serious financial problems so easily. The new fiscal rules, for instance, will help to achieve this – provided that they are applied strictly in practice. The no bail-out principle also needs to be reinforced for public finances.
See Board of Governors of the Federal Reserve System (2014), “Federal Reserve Issues FOMC Statement”, press release, March 19, paragraph 5. 5  See Board of Governors, “FOMC Statement”, March 19, 2014, paragraph 5, in note 4. 6  See Board of Governors, “FOMC Statement”, March 19, 2014, paragraph 6, in note 4. 2  BIS central bankers’ speeches