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What is a bank bail-in? How failing banks are rescued without taxpayers

By SendPay Business · · 2 min read

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A bail-in is a way of rescuing a failing bank by making its shareholders and certain lenders absorb the losses, instead of using taxpayers' money. After the 2008 financial crisis, the UK and EU gave authorities the power to do this.

Bail-in vs bailout

In a bailout, the government puts in public money to keep a bank going, as happened with several UK banks in 2008. In a bail-in, the bank's own investors pay: their shares or bonds are written down or turned into new shares to rebuild the bank's capital.

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Who takes losses first

  • Shareholders.
  • Holders of bonds designed to absorb losses.
  • Other unsecured lenders to the bank.
  • Only in rare cases, deposits above the protected limit.

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The Cyprus example

In 2013, as part of an international rescue, large depositors at two Cypriot banks lost part of their savings above €100,000. Protected deposits under that limit were not touched.

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Protected deposits

In the UK, deposits covered by the FSCS are excluded from bail-in. Check the FSCS website for the current limit.

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SendPay Business is a technology company, not a bank. Accounts, cards and payments are powered by licensed partners.

Questions people ask

How much of my savings is protected?

See how much is within the FDIC, EU or FSCS limit.

Deposit insurance calculator →
What is the FSCS?

The UK's deposit protection scheme.

What is the FSCS? →
What is deposit insurance?

Schemes that protect savers' money.

Deposit insurance →
What is a bank stress test?

Checks that banks can survive a crisis.

Bank stress tests →

Read next

Spotted a mistake or something out of date? and we'll fix it. How our guides are made

This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. Other companies named in this guide are reference points only and are not affiliated with SendPay Business.