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BELGIUM: Private sector to share burden of Spanish bank restructuring but senior bank bondholders and depositors will not bear burden of the banks recapitalisation says European Commission
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The private sector will be involved in bearing the cost of restructuring Spain's banks, but senior bank bondholders and depositors will not be affected by such burden-sharing, a spokesman for the European Commission said on Wednesday (July 11).
"Once we are at that stage we will have a clear sense of the costs of restructuring on a bank by bank level. We will work on the principle that private sector participation in the distribution of losses is necessary in order to ensure that taxpayers do not have to shoulder an unfair burden," European Commission spokesman Simon O'Connor said.
"This approach has been based on the principles of minimising the costs to taxpayers while at the same time safeguarding financial stability."
The spokesman emphasized the bondholders and depositors will not have to share the burden with the private sector.
"It is clear that senior bondholders would not be involved in this burden-sharing. A key principle of the bank recapitalisation and restructuring exercise is to safeguard financial stability. Clearly obliging the depositors, who will also, let me emphasise, not be involved in any burden-sharing and also senior bondholders, would run counter to that requirement."
The private sector will be involved in bearing the cost of restructuring Spain's banks, but senior bank bondholders and depositors will not be affected by such burden-sharing, a spokesman for the European Commission said on Wednesday (July 11).Read more
|Timecode:||00:40:00:01 - 00:41:58:18|
|Sound:||NATURAL WITH ENGLISH SPEECH|
|Syndication:||3150EU BELGIUM-SPAIN BANKS @ Jul 11|
|Restrictions:||Information for Reuters subscribers only: NONE|
|Note:||Tape timecodes are in use for this item|
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