BRUSSELS (AP) — The European Union is moving ahead with plans to shield taxpayers from having to bail out big banks in the future, but there are substantial obstacles to making bondholders share losses.Read the res here.
The EU's executive Commission on Thursday presented plans that could give national regulators the power to force the owners of bank bonds to accept so-called haircuts — a reduction in the amount of money they are owed.
But the Commission stressed that any new bond rules would not affect existing debts — an issue that is closely watched in Ireland, where the government's commitment to guarantee struggling banks' debts pushed the country to the brink of default.
The EU proposal forms part of a larger package designed to give regulators the tools to deal with banking crises and keep institutions from becoming too big to fail.
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