5.56NATO
06-19-2013, 05:09 PM
(Reuters) - Euro zone finance ministers will discuss on Thursday how to decide which creditors will lose money and in what order during future bank rescues by the bloc's bailout fund, the European Stability Mechanism.
They will consider four potential options that range from shielding depositors and senior bondholders to imposing losses on some of them.
The options are listed in a preliminary document "ESM direct recapitalisation - role of bail-in" prepared for the ministers for their discussion of guidelines on when the ESM can invest in a systemically important bank to save it from failure.
http://uk.reuters.com/article/2013/06/17/uk-eurozone-esm-bailin-idUKBRE95G0NR20130617?feedType=RSS&feedName=businessNews
If you didn't know, a "bail-in" is where bank losses aren't paid by the bank, they're paid by those who have accounts at that bank. What this means is the bank can gamble and never lose, at least not its own money. This legislated crime will be applied to American banks I bet.
They will consider four potential options that range from shielding depositors and senior bondholders to imposing losses on some of them.
The options are listed in a preliminary document "ESM direct recapitalisation - role of bail-in" prepared for the ministers for their discussion of guidelines on when the ESM can invest in a systemically important bank to save it from failure.
http://uk.reuters.com/article/2013/06/17/uk-eurozone-esm-bailin-idUKBRE95G0NR20130617?feedType=RSS&feedName=businessNews
If you didn't know, a "bail-in" is where bank losses aren't paid by the bank, they're paid by those who have accounts at that bank. What this means is the bank can gamble and never lose, at least not its own money. This legislated crime will be applied to American banks I bet.