The Specific PSI Literature

When referring to the “specific” PSI literature, we mean three quite distinct categories of articles, which have one thing in common: they explicitly refer to the debate on and the concept of PSI or bail-in. The first category comprises the many policy reports on PSI published by the official sector. The second contains a number of more analytical studies on the PSI debate published in academic journals. Finally, there are contributions that make efforts to define and categorize the concept of PSI.

Policy reports on psi: the official sector view

PSI has been a “hot topic” in the international public debate since 1995 (Haldane 1999). Accordingly, over the years many reports and statements on PSI were published by different official players. Among the more important documents in this debate are the reports by the Group of 10 (Group of 10 1996), the Group of 22 (Group of 22 1998), the Group of 7 (Group of 7 2000), the contributions by the Bank of England and the Bank of Canada (Haldane and Kruger 2001), the many IMF reports on the issue (IMF 1999b; 2000; 2001; 2003) as well as the voices from the U.S. Treasury (Rubin 1998; Taylor 2002).

As Roubini and Setser (2004) pointed out: 7 PSI became the “accepted jargon” for a new policy followed by international organizations and Western governments to reduce official funding in crisis resolution by “binding-in” private investors, essentially by sharing crisis costs in a significant amount. With such a definition in mind, the political message behind the propagation of PSI is clear: creditors and investors rather than the general tax payer in the United States or Europe should “bear the consequences of their decisions as fully as possible” (U.S. Treasury Secretary Rubin in a speech on January 21, 1998). At this point, it seems important to emphasize that the official understanding of PSI as a policy goal remains rather unspecific. Hence, it differs from an understanding of PSI as a coherent theoretical concept of public- private partnerships as a governance mode in crises.

 
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