EU to Decide Who Pays When Banks Fail

A 300-page draft EU law that forms the basis of discussions recommends a pecking order in which first bank shareholders would take losses, then bondholders and finally depositors with more than 100,000 euros ($132,000) in their accounts.

EU countries would be required to follow these rules when closing banks.

The regime to impose losses on savers, whether wealthier individuals or companies, could be made stricter within the euro zone, in particular for banks seeking help from the single currency’s rescue fund.

This had been on their radar for several months. I can’t make up my mind on whether the move is sane or not: the entire point of saying, in 2008, that bank depositors would be made whole was to avoid bank runs.

Update: it looks like they failed to agree on the topic.