The European “Bail-Ins” Will Continue Until Morale Improves…(Will Go Global!!)
by Tyler Durden
While we have been told vehemently that the Cypriot deposit confiscation was not a template, yet another European nation is embarking on an until-now-considered-safe asset class to recapitalize its banks. As The Telegraph reports, pensioners and other retail investors in the Co-operative Bank are facing massive losses under a GBP1.5 billion rescue plan for the ailing mutual as investors and the bank’s parent would make “a joint contribution” to the bank’s recapitalisation, without any help from taxpayers. It seems the days of ‘hoping’ for a bail-out are over and perhaps that is why European financial credit has been underperforming – as that reality has yet to strike equity holders. The realization that deposits (or their mutual equivalent) are nothing more than loans to highly levered institutions may begin to dawn on a European (or in fact global) depositor base.