All senior creditors should not necessarily be treated equally in the event of a bank bail-in, according to Andrew Gracie, director of the Bank of England’s special resolution unit. His comments, made in a speech to the British Bankers' Association on Monday, mark a departure from European proposals relating to crisis management.
Regulators should have discretion over which liabilities are bailed in and should not be obliged to treat all creditors within the same asset class in the same way, Gracie said. He argued that this was important in order to avoid any negative effects on systemic stability, he said.
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