Bank Bondholders Set to Face More Bail-In Pain: Chart of the Day
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Spanish investors won’t be the last to suffer losses on bank debt as measures of sovereign and financial bond risk signal governments will shift the burden of rescuing failing lenders.
The CHART OF THE DAY shows that the Markit iTraxx Subordinated Financial Index is underperforming the Markit iTraxx SovX Western Europe Index by the most since 2010, when Ireland forced lower-ranking bondholders to share the cost of saving its banking system. The gauge of credit-default swaps on 25 banks and insurers now exceeds the sovereign benchmark by