The Basel Committee on Banking Supervision is making progress in its search for ways to ensure that when banks fail, or get close to failing, the price is paid by private-sector creditors, not taxpayers, according to The Economist. The most promising approach for big banks with huge losses is giving regulators draconian powers over a small part of their balance sheets, principally the least senior slice of banks' debt, known as Tier 2 capital. "The hope is that regulators might have a means to impose losses on the private sector in a controlled way, and not just face a binary choice between bail-out or oblivion," the magazine notes.

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