Germany To Be As Ruthless With Bank Creditors As It Was With Brazil


Bondholders will have to be down 8(%)-0 before the German taxpayer steps in.

Germany plans to force creditors into propping up struggling banks beginning in 2015, one year earlier than required under European-wide plans that set rules for failing financial institutions, according to a senior German finance ministry official.

From next year, struggling bank creditors, in addition to shareholders, will have to help financial institutions, covering up to 8% of liabilities, before the banks can tap Germany's financial markets stabilization fund SoFFin, said the official, who declined to be identified….

Germany has been a strong proponent of forcing bank shareholders and creditors rather than taxpayers to shoulder the cost of winding down or rescuing banks.

Germany to Force Creditors to Prop Up Struggling Banks in 2015 [WSJ]


Germany Looks At Its Banks

For all their saber-rattling and bold talk about a final solution to the problem of global financial risk, the Germans haven't done a hell of lot to rein in their banks. There is, for instance, no GroƟdeutschesvolckerregierung. At least, not yet.