Warning over discriminatory EU ‘bail-in’ plans

European proposals to make bondholders share the pain of any future bank recapitalisations risk singling out some investors for losses while leaving other creditors of traditionally equal stature in an insolvency untouched, lawyers warned in a response to the European Commission's Consultation on technical details of a possible European crisis management framework, February 2011.

The provision is part of the European Union’s new framework to manage future bank crises and protect taxpayers from footing the bill. A central tenet of the plans would give regulators the power to impose losses on bondholders to 'bail-in' a failing institution before public funds were used to bail it out.

European Commission: DG Internal Market and Services: Consultations: Consultation on technical details of a possible European crisis management framework, 2011 http://ec.europa.eu/internal_market/consultations/2011/crisis_management_en.htm

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