When a country bails out its banking system, bad private assets migrate onto public balance sheets, so the relevant analysis becomes which sovereign balance sheets can absorb the losses—the US could (lost ~$800B against ~$1T of bank equity and one-times-GDP banking assets) while smaller European systems like Iceland and Ireland, with banking assets ~10x GDP, could not and fell in succession, followed by Greece.

causalpending

Speaker

Kyle Bass

Evidence Quote

you had to follow the bad private assets to public balance sheets. So then the analysis was which public balance sheets can handle that kind of movement of that many bad assets.

Source

Global Macro Investing And Geoeconomics With Hedge Fund Investor Kyle Bass | Hoover InstitutionHoover Institution
Created: 6/18/2026, 2:17:47 PM

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