Credit investors to face losses before taxpayers under Basel proposal

Fears for tiers

Shedding a tier: Bank investors are questioning the future of tier 2 debt

The list of financial institutions that benefited from government bailouts during the financial crisis reads like a Who’s Who of the industry. It includes Bear Stearns and Citigroup in the US; Northern Rock and Royal Bank of Scotland in the UK; and seemingly every bank in Ireland and Iceland.

All of the above, and many more financial institutions besides, were bailed out at taxpayer expense while, by and large, holders of bonds issued by those firms avoided taking heavy haircuts on their investm