Greek bank bonds: brace yourself for bail-in

Greek bank bonds suffered heavy losses this week after Eurozone finance ministers agreed that senior bondholders would be bailed-in when Greece’s banks are restructured later this year.

In our latest post from Kate Stephenson, Alex Wood and Andrew Wilkinson, we cover:

  • moves to restore the financial stability of Greek banks by bailing in senior bondholders (and sparing depositors);
  • a quick recap on the European Bank Recovery and Resolution Directive, which is being implemented into Greek law;
  • the new stress tests / asset quality reviews, which will form the basis of resolution measures;
  • areas of uncertainty regarding the potential resolution measures; and
  • some crumbs of comfort for stakeholders.

This post is particularly relevant for bondholders and shareholders of Greek banks. It is also relevant for stakeholders in other European credit institutions, as Greece will provide a test case for new EU rules on resolving failing banks.

Click here to read the full article.