EU targets senior creditors at ailing banks

All bondholders should be forced to take losses in an ailing bank under draft European Union proposals, which aim to avoid taxpayers again having to fund bailouts in a future crisis. The EU's executive Commission is due to publish a consultation paper as soon as this week to shape its crisis management legislative proposals later in the year.
The changes would only affect new debt issued probably from 2012 or 2013 at the earliest, if approved. Fears that Brussels would force existing holders of senior debt to share the burden of Ireland's bank bailout last year rocked markets. The International Monetary Fund wanted holders of senior credit in Irish banks to take a hit but was opposed by the European Union and the European Central Bank whose arguments prevailed.