'Never again' (or not?)—The European bail-in regime has yet to solve the systemic problem of implicit government guarantees

It is high time that Europe break the nexus between banks and national sovereigns. If the loopholes of the European bail-in regime are not closed soon, the Banking Union is doomed to fail. As sovereigns issue record levels of government debt to fund the response to the COVID-19 pandemic and the ECB is providing new long-term refinancing operations at attractive negative rates that allow banks in the Eurozone to earn big money on their sovereign risk exposure, the European banking system risks slipping back into the 'doom-loop' and threatening the future of the common currency. Never again!