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Bank Watch, page-37

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slange

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19/05/16

19:58

Post #: 17817420
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Originally posted by siameseparrot ↑

Europe’s quest for bank ‘bail-ins’ poses risks to retail investors

When Ignazio Visco, governor of the Bank of Italy, spoke in Florence this month, his focus turned to regulation.

At a sensitive moment for Italian lenders, whose shares had collapsed over recent months, the governor chose to address what he called “regulatory uncertainty” in the wake of new European-wide rules for failing banks.

“We must strike the right balance,” he said. “We should not rule out the possibility of temporary public support in the event of systemic bank crises, when the use of a bail-in is not sufficient.”

Taxpayer support for banks, however, was precisely what the new European rules introduced at the start of this year aimed to avoid. To protect taxpayers, investors in bank bonds — mostly untouched during the bailouts of the last crisis — now face losses, or “bail-ins”.

The tension between the Italian central bank and European regulations is related to who owns this debt. In Italy, many retail investors hold exposed bank bonds, and a “bail-in” of small Italian banks in November last year was politically sensitive for this reason.

The full read is at http://www.ft.com/cms/s/0/bd6c5a9a-1d0e-11e6-a7bc-ee846770ec15.html#axzz495sMKdm4

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yeah,Brexit may be an issue here
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0 Great analysis

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