Burning bank bondholders offers a chance of survival
IT'S not exactly a case of locking the stable door after the horse has bolted. These are the subordinated bondholders whose loans will not be repaid in full by Bank of Ireland and Irish Life & Permanent. Indeed, they will get at most just 20pc of their money back. They are called "subordinated" because, in a general wind-down, they would be last in the queue of creditors and probably get nothing. So they are not in a position to bargain.
There may still be arguments, and threats of legal action. But similar losses have already been imposed on lenders to AIB, Anglo and Nationwide -- the sign on whose main branch came down last night; symbolising what may well be the most scandalous episode in this whole sorry saga.
Bank of Ireland is different. Not only is it the least damaged of our banks, but its 230-year history makes a default on its loans a bitter pill for the bank, as well as bondholders and shareholders.