Fitch Ratings: EU Bank Bail-In Rules Expose Investors to Cross-Border Risks
Source: https://www.fitchratings.com/site/pr/10077809
"Fitch Ratings-London-04 June 2019: EU regulators have finalised the bank recovery and resolution "bail-in" minimum requirements for EU global systemically important banks (GSIBs) and banks with more than EUR100 billion in assets.
However, in the event of a cross-border bank failure, it remains unclear how losses would be shared between local or foreign-based investors. This will depend on the bank's resolution and issuance strategies, whether parent and subsidiary banks have different regulators or resolution authorities and potentially political considerations, Fitch Ratings says. "
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How does this not make EU "junk grade"?
Source: https://www.fitchratings.com/site/pr/10077809
"Fitch Ratings-London-04 June 2019: EU regulators have finalised the bank recovery and resolution "bail-in" minimum requirements for EU global systemically important banks (GSIBs) and banks with more than EUR100 billion in assets.
However, in the event of a cross-border bank failure, it remains unclear how losses would be shared between local or foreign-based investors. This will depend on the bank's resolution and issuance strategies, whether parent and subsidiary banks have different regulators or resolution authorities and potentially political considerations, Fitch Ratings says. "
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How does this not make EU "junk grade"?
