Two Shades of German Seniors Show Bail-in Pecking Order
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The European Union put senior bondholders in line for losses when banks fail, and Germany is leading the drive to make them actually take the hit should the time come.
The German Finance Ministry has proposed measures that amend the order in which creditors are served if a bank becomes insolvent. The legislation would subordinate senior unsecured bonds to other senior liabilities such as unsecured deposits and derivatives, clearing the way for writedowns in a crisis.