The timing was hardly ideal. Just as funding seized up for some of Europe’s banks, Brussels was gearing up this fortnight to tell senior bondholders to shoulder the burden of rescuing stricken financial institutions.
Whatever the merits of the “bail-in” proposals — and analysts say there are many — it is not exactly a palliative for panicky investors. Little wonder the plan has been shelved, at least for a month or two.
You could see it as a lesson learned. When Michel Barnier, the internal market commissioner, floated the measures in January, bond markets virtually froze for a few days. The stakes are only higher now.