“The ESCB believes there is a sound economic rationale for developing a debt write-down tool (bail-in) within the context of bank resolution. Its main purpose should be to efficiently enforce burden sharing within the private sector and avoid taxpayer support. It is essential, however, that the introduction of this tool should follow closely the solution adopted in the context of the FSB [Financial Stability Board].” P.18
That’s nice and clear. There is a ’sound economic rationale’ in creating a system which avoids ‘taxpayer support’.
As part of a long slow, slog, approach, it is conceivable that the euro-zone area will get to a position where the new system is in place, and thus taxpayers are protected, and Ireland stands alone as the single country where the taxpayers have lost out massively due to an international banking collapse.
There’s some traction here for an ongoing argument that such an outcome is inequitable and unjust.
However, note that there wasn’t a peep out of the government about Anglo bondholders yesterday. And not a mention on RTE about Anglo bondholders. The whole story got buried relative to the high profile coverage for the subdebt offers.