The European Central Bank would no longer oppose the forcing of losses on senior bondholders of euro-area banks, said two officials with knowledge of the ECB's thinking.
A key condition to imposing losses is if the bank in question is being wound down, one of the officials said. The ECB supported imposing losses on senior bondholders of ailing Spanish banks at a meeting of euro-area finance ministers in Brussels on July 9, though the proposal didn't get much traction, the other official said. Both of them spoke on condition of anonymity as the talks are confidential.
The Wall Street Journal today reported the ECB's change of position, after the Frankfurt-based ECB consistently opposed handing losses to senior creditors of Irish banks following the collapse of the country's financial sector. An ECB spokesman declined to comment on the WSJ report.
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