
‘Bail-in’ solution rather than bailout, says AFME

The Association for Financial Markets in Europe (AFME) last month put forward the use of “bail-in capital”, where debt is converted to equity at the behest of regulators, as a means of recapitalising troubled firms without the need for government bailouts.
If a regulator judges a firm to be failing and a bail-in needed to provide better value for investors, then the conversion from debt to equity would occur along with a writedown of a firm’s assets and a conservative estimate of the amount of
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