EU banks eye hard slog of contract changes to meet bail-in rule

Banks required to include clause exposing foreign counterparties to potential haircuts

Change of terms: lawyers foresee problems for banks in amending client contracts

European banks are facing a tough sell over the coming months, as they try to convince foreign investors and derivatives counterparties to accept the risk that some existing liabilities could receive a haircut in the event of the bank's collapse.

European Union rules on bank recovery and resolution require bonds, out-of-the-money swaps and other liabilities to be subject to bail-in even if they are not governed by EU law – which means altering contract terms. Lawyers predict that will be

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