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Euro-Zone Reform Proposals Don't Go Far Enough

Large bank failures in recent years have led to reforms that strengthen crisis prevention and give regulators and banks the tools for dealing with crises that do occur. Similar policy measures can be helpful in dealing with sovereign crises -- when governments run out of money and credit. Unfortunately, the European Commission misses the mark in its recent proposals to upgrade the euro zone’s sovereign crisis management system.

Sovereigns, like banks, can get into trouble. Some of the same prevention and treatment rules should apply.