The Eurogroup issued a statement on Monday night denying that its chief, Dutch Finance Minister Jeroen Dijsellbloem, had suggested that depositor bail-ins would be used for bailout programs as in the case of Cyprus.
“Cyprus is a specific case with exceptional challenges which required the bail-in measures we
have agreed upon yesterday,» the Eurogroup said in a statement.
“Macro-economic adjustment programs are tailor-made to the situation of the country concerned and no models or templates are used.”
Earlier, Dijsellbloem had suggested that bank shareholders, bondholders and depositors could be asked to contribute to the recapitalization of lenders instead of the banks being lent money as part of bailout programs.
“If there is a risk in a bank, our first question should be ‘Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?’. If the bank can’t do it, then we’ll talk to the shareholders and the bondholders, we’ll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders,» he said in an interview with Reuters and the Financial Times.
“If we want to have a healthy, sound financial sector, the only way is to say, ‘Look, there where you take on the risks, you must deal with them, and if you can’t deal with them, then you shouldn’t have taken them on’,» added the Dutch minister, whose comments caused surprise on the markets.
“The consequences may be that it’s the end of story, and that is an approach that I think, now that we are out of the heat of the crisis, we should take.”