• If the burden is passed on to the struggling taxpayers, it would destabilize the sound countries. This step will act as a firing up channel rather than a firewall, which will enable the flames of the debt crisis to burn through to the rest of the European government budget.
• It has been noted that the asset ownership in bank equity as well as bank debt tends to be extremely concentrated. Some of the richest households in every country own these stakes. Not bailing-in these households would amount to a gigantic negative wealth tax for the benefit of wealthy individuals worldwide, at the expense of Europe's taxpayers, social transfer recipients and pensioners.
• Misallocation of capital in the banking system will not only bloat the banking sector but also perpetuate the overly risky activities of these banks signaling a slower recovery in the long run.

The need of the hour is formation of a centralised supervision and resolution authority to address the European banking crisis. This bank resolution should be subject to binding rules for shareholders' losses and liabilities. If the banking sector continues with its lethargy and the commission's proposal passes the European Parliament without adequate revision, Europe's taxpayers and citizens would have to contend with a bigger hit of public debt - such an event could pave the way for another economic decline.