Hits shareholders and junior bondholders before taxpayers foot part of the bill.
This updated EU rule book is based on the experience in Spain – where junior bondholders were hit and EU restructuring plans were agreed before the disbursement of bailout funds – and the Netherlands, which hit subordinated creditors in the nationalisation of SNS Real.
However, it stops short of the Cyprus bank restructuring, which imposed losses on senior bondholders and uninsured depositors. The EU is presently negotiating a directive that could bail-in senior bank creditors but these rules are unlikely to be enforced systematically before 2018.



