Policymakers face a trade-off between placing losses on a narrow set of taxpayers today (bail-in) or spreading that risk across a wider set of tax-payers today and in the future (bail-out). If governments are risk-averse and wish to smooth the pain across taxpayers and across time, then bail-out may look attractive on the day. Financial history certainly suggests so. The history of big bank failure is a history of the state blinking before private creditors (Haldane (2011)). Recent crisis experience has written another chapter in this history. Next time may be different. For example, the public backlash against future bail-outs could reinforce government’s resolve to impose losses on creditors. And recent US legislation in principle locks the tax-payer cashbox and throws away the key. Looking forward, the issue is whether this ex-ante rule is ex-post credible. BIS central bankers’ speeches  5  As Chart 6 illustrates, implied levels of support for the US’s biggest banks are much higher than before the crisis. More telling still, the passage of Dodd-Frank appears to have had little impact on levels of implied state support. It is early days for this new resolution regime and credibility may take time to be earned. Nonetheless, at present the market believes the timeconsistency problem for big banks is as acute as ever. Even if it might appear the expedient option on the day of crisis, it is questionable whether bail-out is the optimal response over the medium-term.
I also pay tribute to my predecessors in office in the independent Macedonia, governors Borko Stanoevski, Ljube Trpeski and Petar Goshev and to all management structures of the Bank, both current and former, largely present here tonight. I extend special thanks and recognition to all generations of employees of the National Bank, that dedicated their work life to the institution, and have contributed with maximum commitment and professionalism to the continuous growth and development of the National Bank. This order is your merit, but also a responsibility to continue delivering great results. To continue investing in constant upgrade and to protect the reputation of the institution, thus helping it to come closer to the family of the central banks of the Member States of the European Union. I am convinced that in the next period the National Bank will continue to build and develop itself, and will successfully accomplish its mandate! May we celebrate this great event for many years! 2/2  BIS central bankers' speeches