Mandatory debt restructuring of systemically important financial institutions, or SIFIs, can protect taxpayers from exposure to bank losses, a study by International Monetary Fund staff revealed Tuesday. According the IMF staff, large-scale government support of the financial institutions deemed too big or too important to fail during the recent crisis has been costly and has potentially increased moral hazard. The so-called bail-in power allows a resolution authority to restructure the liabilities of a distressed financial institution by writing down its unsecured debt or converting it to equity, the report said. These kinds of initiatives are intended to protect taxpayers from exposure to bank losses and to reduce the risks posed by too-big-to-fail (TBTF) institutions. "By restoring the viability of a distressed SIFI, the pressure on the institution to post more collateral, for example against their repo contracts, could be significantly reduced, thereby minimizing liquidity risks and preventing runs by short-term creditors," the report said.