Megan E Greene, Columnist

Holding Bonds Is Getting Riskier in Europe

February 6, 2013 at 7:14 PM UTC

She has been appointed as an external member of the Bank of England's Monetary Policy Committee. She will take up her new duties on July 5, 2023. Currently, she is Global Chief Economist for the Kroll Institute, where she advises on the potential impact of global macroeconomic developments and policy on the firm’s business services and those of its clients. She serves as a Senior Fellow at the Watson Institute for International and Public Affairs at Brown University and also teaches at Schwarzman College (Tsinghua University) and the European University Institute. She is also the first Dame DeAnne Julius Senior Fellow in International Economics at Chatham House. She serves on the Academic Advisory Committee at the San Francisco Federal Reserve and writes a regular column on global macroeconomics for The Financial Times. She holds a Bachelor of Arts in Political Economy from Princeton University and a Master of Science in International Relations from the University of Oxford. Previously, she was a Senior Fellow at the Mossavar-Rahmani Center for Business and Government at Harvard Kennedy School and Global Chief Economist at John Hancock/Manulife Asset Management.

Provide news feedback or report an error

Site feedback:

Take our Survey

This article is for subscribers only.

Last week, the Netherlands nationalized its fourth largest bank, SNS Reaal, and to reduce the cost wrote down the value of the bank's subordinated bonds to zero.

This isn't the first time that subordinated bondholders (investors lower down on the food chain when it comes to getting paid back) have suffered in the euro area's financial crisis. That precedent was set in Ireland, where senior bondholders were made whole but junior bondholders took a hit on their bank bonds. Since the beginning of the Irish crisis in 2008, about 14 billion euros ($19 billion) of the total 26 billion euros of subordinated debt has gone unpaid.