EC bail-in proposals could result in two-tier CDS market

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A proposal on bank recovery and resolution published by the European Commission (EC) earlier this month could lead to the emergence of a new type of credit default swap (CDS) for senior debt issued by European banks, say market participants – a move that would split the CDS market between two types of contract. A new CDS instrument would be needed to reflect proposed changes in an EC working paper, Technical details of a possible EU framework for bank recovery and resolution, published