“The European Central Bank, in a sharp turnaround, advocated imposing losses on holders of senior bonds issued by the most severely damaged Spanish savings banks—though finance ministers have for now rejected the approach, according to people familiar with discussions.
The ECB’s new position was made clear by its president, Mario Draghi, at a meeting of euro-zone finance ministers discussing a rescue for Spain’s struggling local lenders in Brussels the evening of July 9.
It marks a contrast from the position the central bank adopted during the 2010 bailout of Irish banks—which, like Spain’s, were victims of a property meltdown—when it prevailed in its insistence that senior bondholders in bailed-out banks shouldn’t suffer losses.”
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