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Spindelegger defends handling of Hypo scandal

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Spindelegger defends handling of Hypo scandal
Austrian finance minister Michael Spindelegger. Photo: EPA/Janerik Henriksson
10:51 CEST+02:00
Finance Minister Michael Spindelegger (ÖVP) sees no need for explanation to his counterparts in the EU about the planned investor's 'haircut' at Hypo Alpe Adria Bank.
Before starting the European Stability Mechanism (ESM) session ahead of the Euro Group on Thursday in Luxembourg, Spindelegger said "my ministerial colleagues would understand that very clearly."
 
He went on to explain that as part of the unified approach within the EU, that "as of January 2016, the same rules apply for all banks when they are being rehabilitated. If it's a bail-in, there must be a creditor participation.  That's the only approach we have anticipated. But this is only valid for subordinated bonds, and never for senior bonds."
 
Asked if he would thus see a need for explanation in relation to other EU finance ministers, the minister said: "I was asked by no one."
 
The Hypo Alpe Adria Bank scandal caused massive losses for Austria, and led to the jailing of a senior banker.
 
A haircut is a financial term reflecting the percentage of an asset that may be deducted to reflect its risk.  The lower the haircut, the lower the risk.
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