November 30, 2017 / 6:22 PM / in a year

EBA's Enria sees challenge to 'bail in' rules in retail debt holdings

MILAN (Reuters) - The head of the European Banking Authority said on Thursday the fact that retail investors in Europe held large amounts of bank debt posed a challenge to the effectives of rules aimed at shielding taxpayers from the cost of bank rescues.

FILE PHOTO - Andrea Enria, chairperson of the European Banking Authority, speaks at Reuters Summit interview in London, Britain, September 25, 2017. Picture taken September 25, 2017. REUTERS/Afolabi Sotunde

“This is what I call the ‘retail challenge’ to banks’ resolvability,” Andrea Enria said in a speech delivered in Milan.

Even if banks stopped placing debt with retail investors now, by 2021 the current stock of retail holdings would still be one third of its current level.

“In a nutshell, the amortization profile of the existing stock is such that the retail challenge is bound to last for a while,” he said.

Reporting by Andrea Mandala, writing by Valentina Za; editing by Francesca Landini

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