Creditors, governments must participate in any ESM bank rescue - document
BERLIN, June 14 (Reuters) - Creditors and governments will
always have to contribute to shoring up a failing euro zone bank
even when the bloc's bailout fund ESM offers direct aid,
according to an EU document, in a move to curb the amount of
support from common euro zone funds.
A document prepared for euro zone finance ministers talks
next week in Luxembourg did not specify the size of the losses
that would be imposed on a bank's creditors, saying only that
their level would have to be appropriate.
"Private capital resources will be explored as a first
solution, including sufficient contributions from existing
shareholders and creditors of the beneficiary institution(s),"
the document, obtained by Reuters, said.
"An appropriate level of writedown or conversion of debt
will have to take place, in line with EU rules," it said.
(Reporting By Matthias Sobolewski, additional reporting by
Annika Breidthardt, writing by Jan Strupczewski; editing by John
O'Donnell)
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Keywords: EUROZONE ESM/RECAPITALISATION